Bharat Forge Q1 Net Loss Due to German Unit Restructuring
By Business Desk
Bharat Forge reports a Rs 90 crore net loss in Q1, impacted by a Rs 358 crore restructuring charge for its German subsidiary facing market challenges.
Bharat Forge Ltd. recorded a consolidated net loss of Rs 90 crore for the June quarter, a significant reversal from the Rs 284 crore profit reported in the prior year.
This downturn was primarily attributed to a substantial one-time charge amounting to approximately Rs 358 crore.
Q1 Financial Overview
- Consolidated net loss: Rs 90 crore
- Previous year’s profit: Rs 284 crore
- Revenue: Rs 4,640 crore, an 18.7% year-on-year increase
- EBITDA: Rs 710 crore, up 5.5%
- EBITDA margin: 15.3%, narrowed from 17.2%
The company’s revenue of Rs 4,640 crore aligned closely with analyst expectations, while the EBITDA of Rs 710 crore fell short of estimates.
The exceptional loss of Rs 358 crore stemmed mainly from restructuring initiatives at its German subsidiary, Bharat Forge CDP GmbH, which is contending with prevailing market difficulties and cost disadvantages.
Restructuring Impact
- Total exceptional loss: Rs 358 crore
- Incidental expenses: Rs 26.7 crore
- Restructuring provision: Rs 330.4 crore
Additionally, Bharat Forge incurred an expense of Rs 8.9 crore related to a voluntary retirement scheme.
Looking ahead, the board has sanctioned proposals to secure funds through equity or debt-linked securities, alongside establishing a new subsidiary in Malaysia dedicated to semiconductor operations.