Share price of Bharat Forge under pressure after earnings decline – Key insights for investors

Bharat Forge's Q3 FY25 results have triggered a sharp reaction in the stock market, with its share price falling over 5% during morning trades on February 13, 2025. The financial performance, impacted by weak demand and lower revenues, has left investors pondering whether to buy, sell, or hold the stock.

Stock Market Reaction to Bharat Forge Q3 Results

Share Price of Bharat Forge opened 4% below it’s previous close of ₹1,105.55 at ₹1,065.85 on BSE. Shares hit it’s Intraday Low of 1,047.25 with the intraday loss of over 5%

The decline reflects investor concerns over the company's weakening fundamentals and challenges in key markets, including Europe and the defence segment.

Bharat Forge Q3 FY25 Results: Key Highlights

Revenue

Total revenue dropped 7.4% year-on-year (YoY) to ₹2,096 crores, impacted by weak demand conditions in Europe and lower sales in the defence segment.

EBITDA Margins

Despite lower revenues, Bharat Forge maintained an EBITDA margin of 28.1%, aided by a favorable product mix.

Net Profit

The company reported a net profit of ₹346 crore, marking an 8.4% decline compared to ₹377.8 crore in the same quarter last year.

What Led to the Revenue Decline?

Bharat Forge attributed its revenue decline to two primary factors:

• Weak Export Demand: The European market witnessed subdued demand, negatively impacting exports.
• Lower Defence Sales: Sales in the defence segment declined on both a sequential and year-on-year basis.

While the company maintained profitability through cost control and a favourable product mix, the lower topline remains a concern for investors.

Challenges for the Company

While the company has the potential for long-term growth in defence and commercial vehicles, current challenges is expected to impact the stock in the short term

Summary

Bharat Forge's share price dropped over 5% after its Q3 FY25 results, reflecting weak demand and lower revenues. The company reported a 7.4% YoY revenue decline to ₹2,096 crores, with net profit falling 8.4% to ₹346 crores. Weak export demand in Europe and lower defence sales contributed to the slowdown. Despite maintaining an EBITDA margin of 28.1%, investor concerns persist. The stock with short-term challenges overshadows long-term growth potential.