Synopsis:
Morgan Stanley has flagged that Bharat Forge and Balkrishna Industries, which derive a significant portion of their revenue from the US market, can face an EBITDA drop by 30% and 10% respectively, triggered mainly by a staggering 50% tariff.
The shares of Bharat Forge and Balkrishna Industries are in focus as a leading global brokerage expects a significant hit in its business. In this article, we will dive more into the details.
About the news
Global brokerage giant Morgan Stanley has raised a red flag about the recent 25 percent increase in US tariffs on Indian exports, set to kick in on August 27, 2025. This move could hit several Indian manufacturing firms hard, especially Bharat Forge and Balkrishna Industries.
With this tariff hike, the total duty on certain Indian exports to the US has now skyrocketed to 50 percent, which is a significant cost burden for these companies in one of their most important international markets.
Morgan Stanley warns that this could really dent profitability, as Bharat Forge might see a staggering 30 percent drop in its EBITDA due to its substantial reliance on the US market, which makes up about 38 percent of its standalone revenue. Meanwhile, Balkrishna Industries could experience a 10 percent hit on EBITDA, given that the US represents roughly 10 percent of its revenue for FY25.
Analysts are concerned that unless these companies can pass on the increased costs to their customers or find new export markets, their profit margins are likely to face serious pressure in the near future.
Also Read: How Indian Textile & Handicraft Exporters Face Challenges After US Imposes Tariffs
Financial and Other Highlights
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.
The company’s revenue for Q1 FY26 came in at Rs 3,909 crore, registering a 4.8 percent decline from Rs 4,106 crore in the same quarter last year. However, on a sequential basis, revenue improved by 1.45 percent 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 percent, increasing from Rs 283 crore to Rs 284 crore.
Balkrishna Industries Limited stands out as a top player in the manufacturing of off-highway tires (OHT), which are essential for various sectors such as agriculture, mining, construction, forestry, industrial work, earthmoving, ports, ATVs, and turf care.
The company distributes its products not just in India, but also across Europe, North America, and other global markets, serving a diverse array of heavy-duty applications.
The company’s revenue for Q1 FY26 came in at Rs 2,760 crore, registering a 1.7 percent growth from Rs 2,714 crore in the same quarter last year. Additionally, on a sequential basis, revenue improved slightly by 0.29 percent compared to Rs 2,752 crore in Q4 FY25.
Net profit declined 41 percent to Rs 288 crore in Q1 FY26 from Rs 490 crore in Q1 FY25. It also saw a quarter-on-quarter decline of 22 percent, from Rs 369 crore in Q1 FY25.
Written by Satyajeet Mukherjee
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