Shares of Bharat Forge fell 7% to Rs 811.80 on the BSE in intraday trade on Wednesday as the company’s overseas business posted an EBITDA loss of Rs 62 crore in the December quarter (Q3FY23) on new product Issues related to the capacity increase of aluminium forging capacity in Germany and the United States. The EBITDA loss of overseas subsidiaries in the September quarter (Q2FY23) was Rs 34.1 crore.

However, management expects this new capacity to turn around in FY24 and enjoy high margins at 75-80% utilisation. “Overseas businesses continue their journey to profitability with a focus on improving capacity utilisation, cost optimisation, price increases and cost reimbursement for customers,” Bharat Forge said.

In Q3FY23, the company’s consolidated net profit fell 81% year-on-year to Rs 78.72 crore due to higher expenses. It posted a profit of Rs 422 crore and Rs 142 crore in the same period last year (Q3FY22) and Q2FY23, respectively. Consolidated revenue rose 40% year-on-year and 9% quarter-on-quarter to Rs 3,353 crore.

However, Bharat Forge posted healthy numbers on a standalone basis for Q3FY23. However, the company’s subsidiaries performed mediocrely, dragging down the consolidated results.

The company’s standalone revenue for the quarter stood at Rs 1,952 crore, up 4.7% quarter-on-quarter, with tonnage up 2.6% to 62,755 metric tons. Standalone EBITDA for Q3FY23 was Rs 535 crore with a margin of 27.4%, up 310 basis points QoQ. Reported standalone profit after tax was Rs 289.1 crore, up 7.8% quarter-on-quarter.