Bharat Forge swings to Rs 89.89 cr loss as other income turns negative
Revenue grew +18.71% YoY, but faster cost growth, higher depreciation and negative other income sharply cut pre-tax profit.
Filed 10 Aug 2026, 13:58 IST · Bharat Forge Ltd (BHARATFORG)
Key takeaways
- Bharat Forge swung to a consolidated net loss of Rs 89.89 cr despite revenue growth of +18.71% YoY.
- Operating margin narrowed by 1.93 percentage points YoY as expenses grew +21.47%, faster than revenue.
- The stock fell 7.60% after the results, well beyond its 3.00% median absolute move after the past eight result announcements.
Price around the results
Revenue growth did not prevent a consolidated loss
Bharat Forge's consolidated revenue rose +18.71% YoY and +2.47% QoQ, but profit before tax fell -89.19% YoY to Rs 44.44 cr. The deterioration came despite operating profit growing +5.43% YoY, as interest rose +9.11%, depreciation rose +16.44% and other income turned negative at Rs 312.02 cr. Net profit consequently fell from Rs 283.87 cr to a loss of Rs 89.89 cr.
Costs and other income drove the earnings break
Expenses grew +21.47% YoY against revenue growth of +18.71%, narrowing operating margin by 1.93 percentage points to 15.29%; the sequential margin decline was 1.90 percentage points. Management cited spiralling energy prices and geopolitical uncertainty as cost pressures, while also pointing to a weak Oil & Gas quarter and lukewarm performance in selected commercial vehicle models. Profit quality was weak: negative other income was equivalent to -702.12% of pre-tax profit, and the tax rate rose to 302.25% from 30.93% YoY.
Margin has declined for three straight quarters
Operating margin has fallen from 18.00% in Q2FY26 to 17.27% in Q3FY26, 17.19% in Q4FY26 and 15.29% in Q1FY27. Even after this decline, Bharat Forge remained 1.99 percentage points above the 13.30% median operating margin of 137 Consumer Discretionary peers that had reported. Sequentially, revenue still increased +2.47%, but expenses rose +4.82%, causing operating profit to fall -8.83%.
Defence orders supported the industrial business
Management said Q1 export performance benefited from inventory restocking and a rebound in North American truck production, while sustained defence execution supported domestic industrial growth. The company said Indian operations won Rs 1,352 cr of orders in Q1FY27, including Rs 681 cr from defence, with a defence orderbook of Rs 11,196 cr at June 30, 2026. Management also said it expects high-horsepower engine momentum and aerospace performance to improve in the second half, and disclosed planned investment of around Rs 1,800 cr over 12–18 months in dedicated forging and machining capabilities.
The market reaction was unusually sharp
The stock fell 7.60% after the results, with a 12.61 times volume ratio and a 7.65% underperformance versus the relevant market comparison. That decline was substantially larger than the 3.00% median absolute move across the past eight result reactions, during which the stock rose five times and fell three times.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,640 cr | ₹4,528 cr | +2.47% | +18.71% |
| Other income | ₹-312 cr | ₹-47 cr | -569.86% | — |
| Expenses | ₹3,930 cr | ₹3,750 cr | +4.82% | +21.47% |
| Operating profit | ₹709 cr | ₹778 cr | -8.83% | +5.43% |
| Operating margin (%) | 15.29% | 17.19% | — | — |
| Interest | ₹90 cr | ₹84 cr | +6.29% | +9.11% |
| Depreciation | ₹263 cr | ₹255 cr | +3.21% | +16.44% |
| Profit before tax | ₹44 cr | ₹392 cr | -88.67% | -89.19% |
| Tax | ₹134 cr | ₹159 cr | -15.35% | +5.67% |
| Net profit | ₹-90 cr | ₹233 cr | — | — |
| EPS (₹) | ₹-1.88 | ₹4.86 | — | — |
Operating margin of 15.29% compares with a Consumer Discretionary sector median of 13.30% across 137 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -7.60% | -7.65% |
Volume on the results session was 12.61× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Export performance was driven by inventory restocking and a rebound in North American truck production volumes.
- Sustained defence execution drove robust year-over-year growth in the domestic industrial business.
Guidance & outlook
- The company maintains a FY27 growth outlook of 20–25% for its Indian manufacturing business, with growth more pronounced in the second half.
- The company expects momentum in the high-horsepower engine segment to pick up in the second half of FY27.
- The company expects aerospace performance to improve materially year over year as recent order wins enter production.
Expansion
- The company is investing around Rs 1,800 crore over 12–18 months in dedicated forging and machining capabilities for sunrise sectors, including an Andhra Pradesh energetics plant.
- The planned investments are expected to generate incremental revenues in the coming years after commissioning.
New orders
- Indian operations won Rs 1,352 crore of orders in Q1 FY27, including Rs 681 crore from defence, with a defence orderbook of Rs 11,196 crore at June 30, 2026.
- The company signed its largest naval order for 12 marine gas turbine generator sets with the Ministry of Defence.
New initiatives
- The company is re-evaluating its global manufacturing footprint outside the recently restructured EV and German Forging businesses.
- The company has undertaken restructuring actions in its EV and German Forging businesses.
Problems & risks
- The company cited spiraling energy prices and geopolitical uncertainty as cost pressures during the quarter.
- The Oil & Gas segment had a weak quarter.
- The commercial vehicle business had a lukewarm quarter because of low growth in selected models supplied by the company.
- The company said achieving medium-term profitability remains challenging for parts of its global manufacturing footprint.
What to watch
- Whether operating margin stabilises above 15.29% after three consecutive quarterly declines.
- Whether other income moves back from negative Rs 312.02 cr and reduces its -702.12% share of pre-tax profit.
- Whether the Rs 11,196 cr defence orderbook converts into revenue while management's FY27 growth outlook of 20–25% remains in focus.