Bharat Forge"s consolidated revenue for Q2FY25 declined by 2.3% compared to the previous year. This decline is attributed to a challenging European business environment and a slowdown in the commercial vehicle sector. However, despite the decline in revenue, the company"s gross profit increased by 5.7% year-on-year, with margins improving by 434 basis points to 57.6%. EBITDA growth was modest at 4.2% year-on-year, with margins expanding by 100 basis points to 17.5%. Profit after tax (PAT) also rose by 6.2% year-on-year.

The company"s defense sector has a strong order book, and anticipated orders from the Indian defense business are expected to support growth. Despite the sluggishness in the commercial vehicle business, management remains optimistic about a recovery in the second half of FY25. Prabhudas Lilladher has maintained an "Accumulate" rating for Bharat Forge, adjusting the target price to Rs 1,501 from the previous Rs 1,639, based on a price-to-earnings ratio of 29.5x for its September 2026 earnings per share.

In summary, Bharat Forge faced a decline in revenue due to a challenging business environment and a slowdown in the commercial vehicle sector. However, the company managed to increase its gross profit and profit after tax. The defense sector is expected to support growth, and management is optimistic about a recovery in the second half of FY25. Prabhudas Lilladher has maintained a positive rating for Bharat Forge, adjusting the target price based on earnings per share.