Synopsis:
Shares gained after the firm signed a ₹453.3 crore business transfer deal for its defence assets. Despite a dip in revenue, profit rose sharply, backed by strong defence orders and stable domestic performance, amid ongoing global market challenges and regulatory shifts.
The shares of the global leader in high-performance components manufacturing gained up to 2.3 percent from intraday low after the company entered into a business transfer agreement (“BTA”) with KSSL for the transfer of identified assets worth Rs 4,533 million.
With a market capitalization of Rs 52,998.52 crore, the shares of Bharat Forge Ltd were trading at Rs 1,108.55 per share, decreasing around 2.66 percent as compared to the previous closing price of Rs 1,138.80 apiece.
According to the company filing, Bharat Forge Ltd has entered into a Business Transfer Agreement (BTA) with its subsidiary, Kalyani Strategic Systems (KSSL), for the transfer of its defence business to KSSL for Rs 453.3 crore. Additionally, the company and KSSL have entered into an Intellectual Property Rights Licensing Agreement.
Looking forward, the company reported mixed financial performance in Q1FY26. While revenue declined 5% year-on-year to ₹3,909 crore from ₹4,106 crore, net profit surged 62% to ₹284 crore from ₹175 crore, indicating improved operational efficiency and profitability despite a dip in topline performance.
Bharat Forge’s export revenue declined to ₹10,753 million in Q1FY26 from ₹12,321 million in Q4FY25 and ₹11,702 million in Q1FY25. While European CV exports showed recovery, North American CV sales fell due to regulatory pauses. Passenger vehicle exports remained stable, but industrial exports lagged due to weaker demand in HHP engines, mining, and a seasonal slowdown in aerospace.
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Bharat Forge reported ₹9,157 million in domestic revenue for Q1FY26, down from ₹10,595 million YoY but up from ₹8,034 million QoQ. CV sales were impacted by market softness and seasonality, while passenger vehicle sales were strong due to new business wins. Industrial segment performance improved, supported by defense execution and one-time orders in machine tools. Other revenue stood at ₹1,137 million.
Bharat Forge faced a challenging quarter due to export market uncertainties stemming from U.S. tariffs and regulatory shifts. Despite this, the company continued to secure strategic defence orders, reflecting resilience and strong positioning in the sector.
The company secured new orders worth ₹847 crore, including ₹269 crore in defence. With a robust defence order book of ₹9,463 crore and positive trends in U.S. and European operations, future visibility looks promising. Caution remains on U.S. exports, while the company prioritizes cost optimization and untapped opportunities.
Bharat Forge Limited is an India-based global provider of safety and critical components and solutions to various sectors, including automotive, railways, defense, construction and mining, aerospace, marine, and oil and gas.
Written by Abhishek Singh
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