Bharat Forge Ltd's Q1FY19 standalone net profit rises 34% yoy to Rs234cr: In-line with Estimates

The company’s standalone revenue stood at Rs1,480cr, up 23% yoy and 1% qoq.

Aug 09, 2018 04:08 IST India Infoline Research Team

Bharat Forge Ltd Q1FY19

Standalone Results Q1FY19: (Rs. in cr)

Q1FY19 YoY (%)
Revenue 1,479.66 23.2
EBITDA 428.60 28.6
EBITDA Margin (%) 29 121
Net Profit (reported) 234.46 33.9
***EBITDA margin change is bps

Results for Bharat Forge Limited (BFL) met consensus estimates in Q1FY19. Standalone revenue stood at Rs1,480cr, up 23% yoy (1% qoq), in-line with consensus estimate. EBITDA grew 29% yoy (3% qoq) to Rs429cr, marginally ahead of consensus estimate of Rs418cr. EBITDA margin expanded 121bps yoy (49bps qoq) to 29% in Q1FY19. Standalone PAT was up 34% yoy (0.4% qoq) at Rs234cr, in-line with street estimate.

Other Highlights

  • Given the trend in commodity price inflation, raw material cost inched up 27% yoy in Q1FY19, growing faster than the top-line. This led to 109bps yoy contraction in gross profit margin to 63.9%, while the margin remained steady sequentially.
  • However, the company managed to keep a lid on its operating expenses and employee costs, which led to EBITDA margin expansion of 121bps yoy and 49bps qoq.
  • The management stated post the result that BFL secured new orders worth Rs120cr in Q1FY19.
Conference call highlights
  • The domestic industrial segment was subdued due to delay in tender-based business. In Defence and Aerospace, BFL has secured tenders,
  • Although conversion of orders is seeing delays; the management expects a turnaround from Q2FY19.
  • The company is setting up an aluminium forging facility in BF PMT in Tennessee, USA, at an investment of $55mn. The facility will commence production in CY20 and will cater to the car market in North America.
  • Standalone capex guidance for FY19 is Rs500cr and for FY20 is Rs400cr.
  • BFL’s German subsidiary has secured a multi-year €40mn order for supplying aluminium forgings to a global premium OEM.

Technical View:

Bharat Forge Ltd is currently trading at Rs. 647.30, up by 7.9 points or 1.24% from its previous closing of Rs. 639.40 on the BSE.
The scrip opened at Rs. 647 and has touched a high and low of Rs. 652.45 and Rs. 639 respectively. So far 11,27,497 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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