Bharat Forge Q2 Net Profit Falls 7% As Expenses Outpace Revenue

Bharat Forge reported a 20.8% year-on-year increase in consolidated revenue from operations to ₹4,870 crore for the quarter ended September 30, 2026. However, consolidated profit after tax (PAT) declined 6.9% to ₹278.7 crore from ₹299.3 crore in the corresponding quarter last year, as the increase in operating expenses outpaced revenue growth.

Total consolidated expenses rose 23.2% to ₹4,469 crore during the quarter, compared with ₹3,627 crore in Q2 FY26. Raw material and component consumption increased 28.9% to ₹2,511 crore, while other expenses rose 27.1% to ₹1,295 crore. Depreciation and amortisation costs also increased to ₹269.8 crore from ₹240.9 crore a year earlier.

The increase in expenses meant that profit before exceptional items and tax declined 3.2% year-on-year to ₹442.4 crore from ₹456.8 crore. After accounting for exceptional items and tax, consolidated PAT stood lower despite the growth in revenue.

The quarter's results also need to be viewed against the previous quarter, when Bharat Forge recognised a substantial restructuring provision relating to its German subsidiary, Bharat Forge CDP GmbH (BF CDP).

German subsidiary restructuring weighs on half-year profit

Bharat Forge has initiated restructuring measures at BF CDP, citing market challenges and associated cost disadvantages. The subsidiary has finalised a social plan with its Works Council, following which the group recognised a restructuring provision of ₹330.4 crore in Q1 FY27.

In Q2, the group recorded additional incidental restructuring expenses of ₹24.6 crore. This was lower than the ₹358 crore exceptional loss reported in Q1, which included the restructuring provision.

Consequently, consolidated profit before tax improved to ₹417.9 crore in Q2 FY27 from ₹4.4 crore in the preceding quarter. Consolidated PAT also moved from a loss of ₹89.9 crore in Q1 to a profit of ₹278.7 crore in Q2.

However, for the first half of FY27, consolidated PAT declined to ₹188.8 crore from ₹583.1 crore in the corresponding period last year, reflecting the impact of the restructuring provision and other exceptional expenses.

Forgings and defence segments report revenue growth

Bharat Forge's forgings business remained its largest revenue contributor, with segment revenue increasing 16% year-on-year to ₹3,894 crore in Q2 FY27 from ₹3,356 crore.

Defence segment revenue rose 19.8% to ₹472.7 crore from ₹394.5 crore in the year-ago quarter. Revenue from the Others segment increased to ₹752.1 crore from ₹587.8 crore.

Despite higher revenue, the forgings segment reported a decline in segment results to ₹497.4 crore from ₹512 crore. Defence segment results increased to ₹13.7 crore from ₹12.3 crore, while the Others segment reported results of ₹54.2 crore compared with ₹37.2 crore.

Bharat Forge approves further investment in defence subsidiary

Separately, Bharat Forge's board approved a further investment of up to ₹290.5 crore in its wholly owned subsidiary, Kalyani Strategic Systems Ltd (KSSL), at fair value and in one or more tranches.

The proposed investment will be funded through proceeds from the company's ₹2,000 crore qualified institutional placement (QIP) completed during the September quarter. KSSL is engaged in developing and manufacturing defence platforms, systems and equipment. It reported a turnover of ₹1,224.5 crore in FY26.