Mumbai: The medium-term growth outlook for Bharat Forge Ltd. remains positive, with brokerages expecting the company’s performance to strengthen during the second half of FY27, supported by the execution of large defence orders, a recovery in Class-8 truck demand in the US and continued momentum in India’s commercial vehicle (CV) market.
The outlook comes despite near-term volatility in the stock and pressure on profitability. Bharat Forge recently reported a consolidated net loss of ₹89.89 crore in Q1 FY27, primarily due to exceptional one-time losses, even as revenue increased by 19% year-on-year.
Defence Business Seen as a Major Growth Driver
The company’s expanding defence order book is emerging as one of the most important drivers of its medium- to long-term growth.
Bharat Forge’s defence order book stood at around ₹10,961 crore at the end of FY26, while defence revenue during FY26 was approximately ₹1,562 crore.
Analysts expect the defence business to see a significant ramp-up from H2 FY27, particularly as orders for the Advanced Towed Artillery Gun System (ATAGS) and Close Quarter Battle (CQB) carbines move into execution.
The company has previously indicated that the execution of ATAGS orders in the second half of FY27 could provide a meaningful boost to revenue growth and profitability.
Recovery in US Class-8 Truck Demand
Another important factor supporting the outlook is the expected recovery in Class-8 truck demand in the United States.
Class-8 trucks are heavy-duty commercial vehicles widely used in long-haul transportation. Bharat Forge is a major supplier of forged components to the global commercial vehicle industry.
Brokerages have highlighted the ageing US Class-8 truck fleet and improving replacement demand as potential catalysts for the company’s overseas automotive business.
ICICI Securities said a robust recovery in Class-8 truck demand, combined with healthy domestic commercial vehicle momentum, could support Bharat Forge’s growth. The brokerage also expects the ramp-up in defence and aerospace businesses to contribute to higher earnings.
Domestic Commercial Vehicle Market Remains Supportive
The Indian commercial vehicle segment is another key pillar of the company’s growth outlook.
Bharat Forge has benefited from strong domestic automotive demand, with company commentary indicating that domestic automotive growth and defence order execution have supported recent performance.
Improving infrastructure activity, transportation demand and replacement cycles could provide further support to the domestic CV market.
Aerospace Adds Another Growth Opportunity
Beyond defence and commercial vehicles, aerospace is increasingly becoming an important growth vertical for Bharat Forge.
The company has reported multiple aerospace business wins and expects the aerospace segment to deliver strong growth in FY27. Analysts also see defence and aerospace becoming increasingly important contributors to the company’s earnings mix.
This diversification could reduce the company’s dependence on traditional automotive markets over the medium term.
Brokerages See Positive Medium-Term Prospects
Brokerage views remain constructive on Bharat Forge’s longer-term business prospects, although valuations and near-term profitability remain key factors to monitor.
ICICI Securities retained a ‘Hold’ rating with a target price of ₹1,900, while raising its FY27 and FY28 EBITDA estimates by 1% and 7%, respectively. The brokerage cited the expected ramp-up in defence and aerospace and recovery in US commercial vehicle demand as key factors.
Other brokerages have also highlighted the improving operational outlook, although some remain cautious about the stock’s relatively high valuation.
Near-Term Pressure, Long-Term Growth Story Intact
Bharat Forge’s recent Q1 FY27 results demonstrate that the company could continue to face near-term margin and profitability pressure, particularly from exceptional items and overseas business challenges.
However, the broader growth story remains supported by multiple structural drivers — defence order execution, aerospace expansion, US Class-8 truck recovery and domestic commercial vehicle demand.
With several of these growth engines expected to gain momentum in H2 FY27, analysts believe Bharat Forge could see a stronger earnings trajectory over the medium term.
For investors, key monitorables will include defence order execution, US commercial vehicle demand, overseas subsidiary profitability, margins and valuation.
