Bharat Forge profit falls 17.40% despite 17.53% revenue growth
Higher tax and negative other income offset operating profit growth, while the shares rose 6.36%, well above their typical post-results move.
Filed 07 May 2026, 12:57 IST · Bharat Forge Ltd (BHARATFORG)
Key takeaways
- Consolidated Q4FY26 revenue grew +17.53% YoY, but expenses grew faster at +18.24%, narrowing operating margin by 0.49 percentage points.
- Net profit fell -17.40% YoY as the tax rate rose 7.11 percentage points and negative other income equalled -11.88% of pre-tax profit.
- The stock rose +6.36% on results day, well above its 2.58% median absolute move after the past eight results.
Price around the results
Q4 revenue gained from truck restocking and domestic CV volumes
Consolidated revenue rose +17.53% YoY and +4.26% QoQ, with operating profit increasing +14.22% YoY. Management said exports benefited from inventory restocking and a rebound in North American truck production after the Q3FY26 cyclical bottom. It also said higher domestic CV production across OEMs and continued support from GST rate cuts aided Q4 demand.
Faster cost growth and tax pushed profit lower
Expenses grew faster than revenue both YoY and QoQ, so operating margin narrowed by 0.49 percentage points YoY and 0.08 percentage points QoQ. The tax rate rose 7.11 percentage points YoY and 7.46 percentage points QoQ, while interest expense increased +10.13% sequentially. Negative other income of Rs 46.58 cr equalled -11.88% of pre-tax profit, making reported profit weaker than operating profit growth suggested.
Operating margin has declined for two straight quarters
Operating margin fell from 18.00% in Q2FY26 to 17.27% in Q3FY26 and 17.19% in Q4FY26. Even after the decline, Bharat Forge remained 2.38 percentage points above the 14.81% median margin across 93 Consumer Discretionary peers that had reported the quarter. Management said the Oil and Gas business weakened on subdued fracking capex, while domestic Industrial performance was affected by modest Defence execution.
Management points to gradual recovery while flagging business pressures
Management said it expects a gradual recovery in the upcoming year as inventory restocking and higher production volumes support CV growth. It said lower North American passenger-car export growth reflected trade uncertainty, though wider penetration into new markets helped offset the effect. The company also said new machine-tool wins and demand from Power, Construction and Mining, and Agriculture helped the Industrial segment offset weaker Defence execution.
Results-day reaction was unusually positive for this stock
The stock gained +6.36% on the results day, with volume at 5.59 times its usual level and a +6.19% move by the next session. That reaction was larger than the 2.58% median absolute move after Bharat Forge's past eight results, when five reactions were positive and three were negative. The gain stood at +4.01% after five sessions and +8.94% after 30 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,528 cr | ₹4,343 cr | +4.26% | +17.53% |
| Other income | ₹-47 cr | ₹-17 cr | -170.81% | — |
| Expenses | ₹3,750 cr | ₹3,593 cr | +4.36% | +18.24% |
| Operating profit | ₹778 cr | ₹750 cr | +3.78% | +14.22% |
| Operating margin (%) | 17.19% | 17.27% | — | — |
| Interest | ₹84 cr | ₹77 cr | +10.13% | -4.09% |
| Depreciation | ₹255 cr | ₹249 cr | +2.51% | +14.01% |
| Profit before tax | ₹392 cr | ₹407 cr | -3.71% | -7.54% |
| Tax | ₹159 cr | ₹134 cr | +18.06% | +12.16% |
| Net profit | ₹233 cr | ₹273 cr | -14.42% | -17.40% |
| EPS (₹) | ₹4.86 | ₹5.53 | -12.12% | -17.91% |
Operating margin of 17.19% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +6.36% | +6.37% |
| Next session | +6.19% | — |
| 5 sessions | +4.01% | +6.64% |
| 15 sessions | +4.45% | — |
| 30 sessions | +8.94% | — |
Volume on the results session was 5.59× 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
- Q4 export performance was driven by inventory restocking and a rebound in North American truck production after the Q3 FY26 cyclical bottom.
- Domestic CV performance was driven by higher Q4 production volumes across OEMs as GST rate-cut tailwinds continued to support demand.
Guidance & outlook
- The upcoming year is expected to see gradual recovery as inventory restocking and higher production volumes aid CV growth.
New orders
- The Industrial segment benefited from new business wins for machine tool supply.
Problems & risks
- FY26 CV business was affected by inventory destocking in the North American truck market.
- Oil and Gas reported weakness in Q4 because of subdued fracking capex.
- Domestic Industrial business weakened sequentially because of modest Defence execution.
- Passenger car export growth in North America was lower amid trade uncertainty.
What to watch
- Whether operating margin recovers from 17.19% after two consecutive quarterly declines.
- Whether the tax rate moves back from 40.47% after rising 7.11 percentage points YoY.
- Whether revenue growth remains above the Q4FY26 rate of +17.53% as North American truck production and inventory restocking develop.