Synopsis:
Bharat Forge reported a robust performance in Q1 FY26, with net profit rising by 62% year-on-year to Rs 284 crore, despite facing macroeconomic challenges and global trade uncertainties.
With a market capitalization of Rs 55,853 crore, the company’s stock is currently trading at Rs 1,168 per share, reflecting a 29% drop from its 52-week high of Rs 1,654.10. Over the last five years, Bharat Forge has delivered a solid return of 136%, underscoring its long-term value creation for shareholders.
Bharat Forge Limited is a leading global supplier of forged and machined components, operating across three major business segments: Forgings, Defence, and Others. It caters to a diverse set of industries, including automotive, oil and gas, railways, marine, aerospace, power generation, construction, and e-mobility. Its key product offerings include crankshafts, axle beams, turbochargers, transmission parts, propellers, and high-precision defence components.
Q1FY26 Performance
The company’s revenue for Q1 FY26 came in at Rs 3,909 crore, registering a 4.8% decline from Rs 4,106 crore in the same quarter last year. However, on a sequential basis, revenue improved by 1.45% compared to Rs 3,853 crore in Q4 FY25.
Net profit grew 62 percent to Rs 284 crore in Q1 FY26 from Rs 175 crore in Q1 FY25. It also saw a marginal quarter-on-quarter growth of 0.35%, increasing from Rs 283 crore to Rs 284 crore.
It generates 35% of its business through the Commercial Vehicle (CV) segment, followed by the Passenger Vehicle (PV) with 18% and the Industrial segment with 47%. India accounted for its largest revenue source, accounting for 47% of its revenue, followed by the Americas with 37%, Europe with 13% and others with 3%.
Segment-wise, the company’s core Forgings business recorded healthy growth, with revenue rising to Rs 3,558 crore in Q1 FY26, up 5.3% from Rs 3,378 crore in the previous year. The ‘Others’ segment also delivered a strong performance, growing 31% YoY to Rs 279 crore from Rs 213 crore. However, the Defence segment posted a steep decline, with revenue falling sharply by 58.8% to Rs 264 crore compared to Rs 642 crore in Q1 FY25.
In terms of exports, Bharat Forge reported a decline of 8.1% in overall export revenue, which fell from Rs 1,170 crore in Q1 FY25 to Rs 1,075 crore in Q1 FY26. Regionally, exports to the Americas dropped from Rs 791 crore to Rs 693 crore, while exports to Europe declined from Rs 318 crore to Rs 294 crore. On the other hand, Asia-Pacific markets showed resilience, with export revenue rising from Rs 62 crore to Rs 88 crore.
CV exports to Europe showed signs of recovery from last year’s lows, while North American CV sales remained under pressure due to delays in emission norm changes and ongoing trade policy uncertainties in the US. Passenger car exports remained stable, supported by Bharat Forge’s diversification into markets beyond North America. The industrial segment, however, underperformed due to sluggish demand in high-horsepower engines, construction, and the seasonal weakness in the aerospace segment.
Bharat Forge’s international business showed mixed performance. Revenue from its European operations witnessed a marginal decline of 0.84% year-on-year, coming in at Rs 1,052 crore. In contrast, US operations posted strong growth, with revenue rising 46% from Rs 259 crore to Rs 378 crore during the same period, reflecting better traction in the American market despite macro headwinds.
During the quarter, the company secured new orders worth Rs 847 Crores, including Rs 269 Crores in Defence. As of Q1 FY26, the defence order book stood at Rs 9,463 Crores. Despite global uncertainties and tariff-related pressures, the company managed to protect its margins and drive profitability through operational efficiency and a focus on cost control.
With stable demand across key segments and strong order inflows, particularly in defence and international operations, Bharat Forge remains cautiously optimistic about future growth.
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Analyst Outlook
Leading brokerages, CLSA, Motilal Oswal and Jefferies, all expect a downside in the stock price. CITI assigned a target price of Rs 870, signalling a downside of 26 percent from its current level. It cited that despite the company’s performance over its expectations, its near-term performance is largely dependent on US tariff uncertainties.
Jefferies also assigned a target price of Rs 950, signalling a downside of 19 percent from its current level. It noted Q1 was tough for the company due to weak exports and rising US-India tariffs.
Management highlighted that US exports stood at $200 million, contributing 10% of revenue, and expects a political resolution to tariff issues soon. A ramp-up of large Indian guns orders from Q4 is seen as a key positive trigger.
While Motilal Oswal assigned a target price of Rs 1,060, signalling a downside of 9.2 percent from its current level, it also added similar reasons for its downgrade, citing tariff uncertainties and changes in emission regulation in North America.
In conclusion, Bharat Forge delivered a resilient financial performance in Q1 FY26 amidst volatile external conditions. While overall revenue moderated slightly, strong profitability, selective market growth, and disciplined execution strategies highlight the company’s continued ability to navigate uncertainty and drive value.
Written by Satyajeet Mukherjee
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