How has been the historical performance of Bharat Forge?

Revenue and Profitability Trends

Over the seven-year period ending March 2025, Bharat Forge’s net sales exhibited a generally upward trajectory, rising from ₹10,145.73 crores in 2019 to ₹15,122.80 crores in 2025. The company experienced a dip in sales in 2021, coinciding with broader economic disruptions, but rebounded strongly in subsequent years. Operating profit margins, excluding other income, fluctuated between 13.6% and 20.26%, peaking in 2019 and 2022, reflecting periods of operational strength. The operating profit (PBDIT) rose from ₹2,055.56 crores in 2019 to ₹2,693.94 crores in 2025, indicating improved cost management despite raw material cost pressures.

Profit after tax (PAT) showed more volatility, with a notable loss in 2021 of ₹97 crores, followed by recovery to ₹916.99 crores in 2025. The PAT margin mirrored this trend, dipping to negative 2.0% in 2021 but stabilising around 6.04% in 2025. Earnings per share (EPS) followed a similar pattern, with a low of negative ₹2.71 in 2021 and a recovery to ₹19.68 in 2025, underscoring the company’s return to profitability.

Cost Structure and Margins

The company’s raw material costs increased from ₹4,238.61 crores in 2019 to ₹6,439.62 crores in 2025, reflecting both volume growth and inflationary pressures. Employee costs also rose steadily, reaching ₹1,869.90 crores in 2025 from ₹1,246.30 crores in 2019, indicative of workforce expansion and wage inflation. Other expenses climbed in tandem, reaching nearly ₹3,965 crores in 2025. Despite these rising costs, Bharat Forge managed to maintain a healthy gross profit margin, which stood at 15.43% in 2025, down from a peak of 21.01% in 2019 but still robust given the market environment.

Balance Sheet and Financial Position

Bharat Forge’s total assets grew from ₹11,482.42 crores in 2020 to ₹19,898.18 crores in 2025, reflecting significant capital investments and business expansion. The net block of fixed assets increased steadily, reaching ₹6,151.46 crores in 2025, supported by capital work in progress of ₹1,725.35 crores, signalling ongoing capacity enhancement. Shareholders’ funds strengthened from ₹5,219.74 crores in 2020 to ₹9,253.33 crores in 2025, with reserves rising correspondingly, indicating retained earnings accumulation and financial solidity.

However, the company’s total debt also increased, peaking at ₹7,522.07 crores in 2024 before easing to ₹6,288.39 crores in 2025. The mix of long-term and short-term borrowings suggests active debt management, balancing growth funding with financial prudence. The book value per share improved from ₹112.07 in 2020 to ₹193.50 in 2025, reflecting enhanced net asset value per share.

Cash Flow and Liquidity

Cash flow from operating activities showed a positive trend, increasing from ₹1,521 crores in 2020 to ₹1,796 crores in 2025, demonstrating strong cash generation capacity. Investing activities consistently reflected outflows, with ₹1,964 crores spent in 2025, indicative of ongoing investments in growth and capacity. Financing activities showed mixed patterns, with outflows of ₹569 crores in 2025, suggesting debt repayments or dividend payments. The net cash position fluctuated, with a closing cash and cash equivalent of ₹577 crores in 2025, down from ₹1,304 crores in 2024 but still maintaining liquidity buffers.

Summary

Overall, Bharat Forge’s historical performance reveals a company that has navigated market cycles with resilience. Despite challenges in 2021, the firm has restored profitability and expanded its asset base. Its improving margins, steady cash flows, and strengthened equity position provide a solid foundation for future growth. Investors should consider these factors alongside sector dynamics and peer comparisons when evaluating Bharat Forge’s investment potential.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →