Bharat Forge Emerges as Defence Manufacturing Powerhouse Amid Automotive Headwinds

Bharat Forge Limited has successfully transformed from an automotive component manufacturer into a leading Indian defence and aerospace player, with its defence revenue surging from ₹410 crore in FY23 to ₹1,772 crore in FY25—a near 330% increase in two years. The segment is now a key growth driver, contributing around 70% of standalone revenue and supported by an executable order book of ₹11,000 crore as of January 2026. A major milestone includes the ₹1,662 crore contract for 2.55 lakh indigenous CQB carbines from the Ministry of Defence, executed through subsidiary Kalyani Strategic Systems Ltd (KSSL). This shift underscores Bharat Forge’s successful pivot to high-value, technology-driven manufacturing with strong DRDO collaboration and IP ownership. In Q2 FY26, the company delivered strong financials: Revenue: ₹4,032 crore (+9.3% YoY) EBITDA: ₹724 crore (+11.8%) Net Profit: ₹299 crore (+23%) However, the automotive segment faced headwinds, especially in U.S. Class-8 truck exports, with CV business declining 20.9% in H1 FY26. Industrial segments contributed 47% of FY25 revenue. With robust capacity at its Khed and Baramati facilities, rising utilisation, and profitability restored in U.S. operations, Bharat Forge trades at a premium P/E of 65.3x (vs sector 29.8x), reflecting investor confidence in its long-term defence-led growth—supported by a 21% profit CAGR over five years and solid ROCE of 12.2%.