Strong order book cannot mask Q1 profit collapse

Consolidated net profit ₹−89.9 Cr loss; PAT YoY fell 131.7%

US EBITDA loss ₹4 Cr due to 3-month steel forging press breakdown

Reported consolidated EBITDA margin 16.2%; cost recovery will be gradual

Breakeven asset turnover >1.5 claimed; no margin% quantified for new capex

Prior 'nearly 25%' → now '20–25% growth' range. ATAGS approval procedural delays cited; analyst noted shift quarter-on-quarter.

Prior ₹800–850 Cr over 15–18 months → now ₹1,800 Cr organic India plus ₹2,500 Cr fundraise for growth in aerospace, semiconductors, power-gen, energetics.

Q1 swung to ₹−89.9 Cr loss (vs prior profit) on cost inflation, US breakdown, restructuring charges. Standalone resilient but consolidation took hit.

₹11,196 Cr outstanding; won large marine gas turbine generators order for Kolkata-class naval ships (first naval platform entry).

160 bps cost hit this quarter. Recovery gradual (not full rebound to 28%) because customer recoveries increase both revenue and costs. Margin per ton will normalize.

Asset turnover >1.5 expected; 'significantly accretive capital output ratio and very good margins.' Capex mix auto/non-auto across forging, machining, heat treatment, ring rolling.

Labor and energy issues mid-quarter due to Iran war and LPG crisis. All segments have strong outlook; India fairly strong, US very strong, Europe CV strong, Europe PV weaker but not weak.

Combination auto and non-auto. ATAGS approval still in supplier testing phase; expecting 'a few weeks' procedural delay, not fundamental. Order and product ready.

Margins result of product mix. Steady-state targeting 22–23% annual range. Also keeping ₹2,000 Cr+ cash for M&A and balance sheet strength.

Aerospace ₹400 Cr now, will double in 2 years. Semiconductors aiming ₹30–40 million in 2 years; machining facilities needed. Data centres (energy business) double in 4 years with long-term contracts.

Product already developed, in testing. Turbine in-house, electrical generator sourced initially. Small investments needed. Multi-fuel. Huge opportunity across naval, commercial, power-gen.

Entity will close. Sizable orders moving to India at good margin; some orders phasing out. Orders pre-approved.

Hoping for all approvals by end-2026. Multi-modal aerospace/engine components facility. 2.5-year build post-approval to first plant online. Infrastructure/forest clearance delays.

FY28 should be strong based on current visibility. Absolutely, growth will kick in margin levers.

Gradual improvement. Numerator and denominator both rise when cost recovery kicks in. Margin per ton will normalize but EBITDA % will improve gradually.

Almost. About 70–75% labor normalcy; some migrant/casual labor hasn't returned. Fuel situation controlled; Maharashtra energy price inflation ongoing.

Haven't been very successful in EVs. Have some ideas; expect 'interesting commentary' in 3–6 months. K Drive making EV axles for LCVs/LMCVs.

K Drive will grow both scale and margins. Strong business coming; new plant planned in northern India for major customer.

Steel 12% EBITDA, aluminum 15–16%. Hopefully next year. Tariff on raw aluminum 50% due to Canada supply; component tariffs 10–15%. Tariff issue needs correction for full margin target.

Cannot disclose; under NDA. Evaluating opportunities; will discuss once reaching certain level.

Manpower redundancy cost finalized. Not paid out now; payout over 6–12 months as people released. One-time for this exercise.

Steel forging press had major maintenance breakdown; no production for ~3 months.

Prior 'nearly 25%' narrowed to range. ATAGS procedural delays ('few weeks') offset by strong defense, aerospace, and capex ramp.

Ring mill Baramati Q4 FY27 production start, new forging facility. Record wins in FY26 support growth.

Machining facilities needed to double this; already won double-digit million business, validation 3–5 years typical.

Product mix volatile quarterly; annual target cited. Q1 benefited from better mix.

160 bps cost hit in Q1 offset by customer price increases. Recovery 'gradual' (numerator/denominator both rise); per-ton margins normalize but % margin slower.

Dependent on tariff correction (50% raw aluminum tariff from Canada). Component tariffs 10–15% vs 50% blended. Macro uncertainty.

Forging, machining, heat treatment, ring rolling across auto and non-auto. Asset turnover >1.5 expected, high capex output ratio.

To fund capex and maintain ₹2,000 Cr+ cash balance. Includes Odisha mega-project investment once approvals received.

Approvals target end-2026. Environmental/forest clearance delays ongoing 2.5 years; infrastructure relocation required.

Q1 consolidated PAT ₹−89.9 Cr loss despite 18.7% revenue growth. Restructuring charges, US press breakdown, cost inflation wiped profits.

ATAGS FOPM approval delayed (procedural testing); Odisha mega-project environmental clearance pending 2.5+ years. Timeline slippages could push H2 defense commencements.

CDP Bharat Forge closure Q3 2027. EUR 30M charge non-cash now; ₹330 Cr manpower redundancy cost paid over 6–12 months. Entity margins weak (3%).

160 bps EBITDA margin hit in Q1 from energy and logistics cost escalation. Recovery is gradual; full pass-through to customers uncertain.

50% tariff on raw aluminum from Canada; US has no smelters. Component tariffs 10–15%. Limits US aluminum EBITDA margin recovery to 15–16% vs prior levels.

₹1,800 Cr capex over 18 months across new facilities (Baramati ring mill, Odisha aerospace, Andhra Pradesh energetics). Delay or cost overruns could derail timeline.