Bharat Forge H1 profit falls 68% on German social plan

Bharat Forge Limited reported consolidated profit of Rs 188.793 crore for the half year ended September 30, 2026, down 68% from Rs 583.148 crore a year earlier, after recording Rs 382.573 crore of exceptional losses, including a Rs 330.421 crore social-plan provision at German subsidiary Bharat Forge CDP GmbH.

Why did Bharat Forge’s H1 profit fall 68%?

Bharat Forge’s H1 profit fell because exceptional losses reduced profit before tax to Rs 462.323 crore from Rs 867.820 crore in the half year ended September 30, 2025. Profit before exceptional items and tax was Rs 844.896 crore, only Rs 22.924 crore below the prior-year Rs 867.820 crore, making the exceptional charge the main reason for the reported decline.

Bharat Forge’s revenue from operations increased Rs 1,569.231 crore year on year to Rs 9,509.907 crore, while total expenses rose to Rs 8,752.451 crore from Rs 7,171.411 crore. Finance costs increased to Rs 186.629 crore from Rs 162.307 crore, and the share of loss from associates and joint ventures, net of tax, widened to Rs 17.329 crore from Rs 4.681 crore.

The quarterly figures show that the charge was concentrated in the June 2026 quarter. Bharat Forge reported a loss of Rs 89.888 crore in that quarter after Rs 358.005 crore of exceptional items, then returned to a profit of Rs 278.681 crore in the September 2026 quarter, when exceptional losses were Rs 24.568 crore.

What did the German social plan cost Bharat Forge?

Bharat Forge recorded Rs 382.573 crore of consolidated exceptional losses in H1 September 2026, comprising a Rs 330.421 crore restructuring provision at Bharat Forge CDP GmbH, which Bharat Forge subsequently refers to as BF CDP, Rs 51.260 crore of incidental restructuring expenses and Rs 89.2 lakh related to its Voluntary Retirement Scheme, or VRS. BF CDP finalised the social plan with its Works Council during the restructuring.

Bharat Forge said BF CDP faced market challenges and associated cost disadvantages, leading it to initiate restructuring actions. The filing does not disclose the number of affected employees, expected savings, timing of implementation or the social plan’s cash-payment schedule, but identifies the provision as a consolidated exceptional item.

The current H1 charge exceeded the group’s full-year exceptional loss for the year ended March 31, 2026. Bharat Forge reported Rs 154.443 crore of exceptional losses in that year, including Rs 42.564 crore of BF CDP restructuring-related incidental expenses and a Rs 15.665 crore redundancy-cost provision at BF CDP.

Bharat Forge also reported that its VRS at the Mundhwa plant, first declared on January 13, 2023, has been extended through March 31, 2027. The H1 VRS expense of Rs 89.2 lakh was far smaller than the German social-plan provision, but it remains a separately disclosed restructuring-related programme.

Which Bharat Forge segments changed in H1?

Bharat Forge’s Forgings segment remained the largest by revenue and segment result, but its H1 segment profit declined, while Defence and Others reported higher revenue and results. Forgings revenue rose to Rs 7,725.144 crore from Rs 6,913.501 crore, while its segment result fell to Rs 932.417 crore from Rs 968.813 crore before interest, tax, unallocable expenditure and exceptional items.

Bharat Forge defines Forgings as forged products and machined components for automotive and industrial sectors. Defence produces products for defence-related activities, although forged components used in defence remain within Forgings; Others covers initiatives outside these two activities.

Defence recorded the largest absolute increase in segment result, rising Rs 35.306 crore to Rs 51.438 crore, while Others increased Rs 6.832 crore to Rs 81.150 crore. Combined segment profit increased to Rs 1,065.005 crore from Rs 1,059.263 crore, before finance costs of Rs 186.629 crore and unallocable expenditure of Rs 33.480 crore reduced profit before exceptional items and tax to Rs 844.896 crore.

What does Bharat Forge’s QIP funding show?

Bharat Forge issued 10,582,010 equity shares through a qualified institutional placement, or QIP, during the September 2026 quarter at Rs 1,890 a share, raising Rs 2,000 crore. Of that amount, Rs 68.329 crore had been used by September 30, 2026 for equipment and machinery, general corporate purposes and QIP-related expenditure, with Rs 1,931.671 crore placed with banks.

Bharat Forge said the QIP proceeds are intended for capital expenditure on equipment and machinery, repayment of buyer’s credit used for capital expenditure, investment in Kalyani Strategic Systems Limited, product and technology development, onward investment in Agneyastra Energetics Limited and general corporate purposes. Transaction costs of Rs 35.574 crore were adjusted against securities premium.

Consolidated total assets stood at Rs 25,259.109 crore at September 30, 2026, compared with Rs 22,259.955 crore at March 31, 2026. Current borrowings increased to Rs 5,687.463 crore from Rs 5,062.263 crore, while non-current borrowings declined to Rs 1,703.625 crore from Rs 1,812.355 crore.

Bharat Forge’s consolidated current ratio was 1.29 times at September 30, 2026, compared with 1.10 times a year earlier, while its debt-to-equity ratio was 0.64 times against 0.66 times. The QIP share issue was included in the calculation of earnings per share for the quarter and half year ended September 30, 2026.

Conclusion

Bharat Forge’s H1 earnings decline was driven principally by the German restructuring charge rather than a contraction in revenue. Revenue increased Rs 1,569.231 crore and profit before exceptional items and tax declined only Rs 22.924 crore, but the Rs 382.573 crore exceptional loss reduced H1 net profit by Rs 394.355 crore year on year.

The next disclosures to watch are further costs, provisions or implementation updates from the BF CDP restructuring and the use of Rs 1,931.671 crore of unspent QIP proceeds. Bharat Forge has also extended the Mundhwa plant VRS through March 31, 2027, which leaves a separately disclosed employee-restructuring programme in place.