BHARATFORG

: Strategic Diversification Fuels Resilience

India-centric pivot offsets global headwinds 🔹 Shift from Automotive Dependency - Bharat Forge has steadily diversified beyond auto components into defence, aerospace, and industrial castings. - Once reliant on North America and Europe for ~50% of revenue, the company now focuses more on domestic growth. 🔹 Defence & Aerospace Momentum - Defence orderbook stands at ₹9,500 crore (Q1FY26), executable over 3–4 years. - Aerospace segment gaining traction with export orders, supporting non-auto revenue streams. 🔹 Industrial Diversification Strategy - Active in oil & gas, data centres, agricultural equipment, and heavy components. - Recent acquisitions (JSA, Sanghvi Engineering) expand footprint in wind energy, construction, and mining. 🔹 Make-in-India & Policy Tailwinds - Positioned to benefit from infrastructure capex and public-private initiatives. - Domestic focus aligns with government’s manufacturing push. 🔹 Auto Segment Still Relevant - Continues to serve export markets despite demand slowdown and tariff pressures. - Growth in utility vehicles and heavy-duty trucks supports auto-linked revenue. 🔹 Global Challenges & Mitigation - North American Class-8 truck orders hit a six-year low in September. - US tariffs on Indian exports (50%) may compress margins; impact shared with OEMs. - European and US aluminium business faces demand and tariff hurdles, though overseas losses are narrowing. 🔹 Localized Operations Cushion Trade Risks - Limited cross-border exposure and regional presence help mitigate global policy shocks. - Inflation and discretionary spend risks remain if trade rigidity persists. 🔹 Earnings Outlook - Brokerages trimmed FY26–FY27 earnings forecasts by 10–15% due to export slowdown. - Domestic diversification expected to offset global margin pressures and sustain profitability. - Bharat Forge’s strategic pivot toward high-return, India-centric sectors enhances resilience.