Bharat Forge Q2 FY26: From Forging Crankshafts to Forging Contracts — The ₹20,000 Million Ambition of India’s Metal Muscle
1. At a Glance
Bharat Forge Ltd, the pride of Pune and the bicep of the Kalyani Group, has once again hammered its way into the headlines — literally and financially. With a market cap of ₹66,418 crore, a current price of ₹1,389, and a P/E of 61.4x, this engineering behemoth seems to have decided that modesty is overrated. The company reported Q2 FY26 sales of ₹4,032 crore and PAT of ₹299 crore, marking a 22.8% YoY profit jump.
In a world where auto component makers are struggling to keep margins from rusting, Bharat Forge is busy winning Ministry of Defence (MoD) contracts worth ₹2,500 million, partnering with Rolls-Royce for fan blades, and signing MoUs with BEML and Data Patterns for future fighter jets. And just in case the drama wasn’t enough, the board also approved raising up to ₹20,000 million through debt, because what’s a strong balance sheet without a little seasoning of leverage?
If you think this is just an auto component company, you’re wrong. Bharat Forge today is more like that overachieving cousin who started as a mechanical engineer and now builds cannons, aerospace parts, and AI-driven factories — and still finds time to talk about “synergies.”
2. Introduction
Once upon a time, Bharat Forge was the humble “steel basher” for trucks and tractors. Fast forward to FY26, and the company is building artillery systems, aerospace components, and AI-powered factories. From forging crankshafts to forging defence partnerships, it’s the classic desi story of a workshop kid turning into a global hustler.
Founded under the Kalyani Group, Bharat Forge’s DNA screams scale, steel, and self-confidence. With an operating margin of 17.7%, ROE of 11.6%, and a ROCE of 12.2%, it’s not exactly a fintech startup kind of “sexy,” but in manufacturing terms, that’s Brad Pitt in a boiler suit.
The company has been on a steady global expansion binge — with 15 manufacturing facilities across five countries, including India, Germany, Sweden, France, and the U.S. Its defense arm, Kalyani Strategic Systems Ltd (KSSL), has become the poster child for India’s Make-in-India weaponry push, while JS Auto Cast, its foundry subsidiary, keeps supplying iron castings for global clients.
Bharat Forge’s playbook is clear: diversify or die. From defence to aerospace to renewables, it’s aiming to become India’s answer to a mini-Lockheed Martin — but with better curries in the canteen.
3. Business Model – WTF Do They Even Do?
In short: they bash metal until it becomes valuable. But let’s dress that up a bit.
Forgings (85% of FY24 revenue) — This is the OG business. Crankshafts, axles, hubs, and transmission parts for auto and industrial sectors. Think of it as the muscular backbone of the mobility world — from cars to trucks to construction monsters. The segment clocked 35% growth between FY22 and FY24, showing Bharat Forge can flex even when auto demand hiccups.
Defence & Others (15% of FY24 revenue) — The crown jewel in their diversification crown. Under KSSL, they make artillery systems, armored vehicles, and ammunition — essentially, everything your neighborhood superpower dreams about. The defense arm saw 280% growth in two years, powered by an order book worth ₹5,192 crore. If war is a business, Bharat Forge is India’s metal middleman.
Geographic Split FY24:
Europe: 35%
USA: 25%
India: 24%
RoW: 16%
The irony? Bharat Forge is selling to countries that once colonized India, and now those same nations are probably buying their tank parts from us. Karma runs on torque.
The company also entered the ferrous castings space by acquiring JS Auto Cast Foundry for ₹489.63 crore in 2022. That’s like adding a heavy-metal drummer to a rock band that already had three guitarists — loud, bold, and necessary.
4. Financials Overview
Metric (₹ Cr)
Sep 2025 (Latest)
Sep 2024
Jun 2025
YoY %
QoQ %
Revenue
4,032
3,689
3,909
9.3%
3.1%
EBITDA
724
647
670
11.9%
8.1%
PAT
299
243
284
22.8%
5.3%
EPS (₹)
6.26
5.23
5.93
19.7%
5.6%
Annualized EPS: ₹25.0 → P/E = 55.6x (vs industry average 31.4x)
If P/E ratios were enthusiasm, Bharat Forge’s chart would look like caffeine overdose. But given their defence pipeline and global diversification, maybe investors are pricing in the potential for “metallic miracles.”
5. Valuation Discussion – The Forged Fair Value Range
Let’s nerd out.
Method 1: P/E Approach Annualized EPS = ₹25. Industry median P/E = 31.4x. Bharat Forge’s current P/E = 61.4x (a bit of an adrenaline high).
Conservative Range (industry avg): ₹25 × 31 = ₹775
Aggressive Range (premium multiple 55–65x): ₹1,375 – ₹1,625
Method 2: EV/EBITDA Approach EV = ₹72,232 Cr; EBITDA (TTM) = ₹2,696 Cr → EV/EBITDA = 26.8x. Peers average around 17–20x.
So, Fair EV/EBITDA range implies value between ₹48,500 Cr – ₹53,900 Cr → translating to a fair value range of ₹950–₹1,150/share.
Method 3: Simplified DCF (based on 10% CAGR for 5 years, terminal 4%) Implied fair range: ₹1,100 – ₹1,400.
🧾 Fair Value Range (Educational Purpose Only): ₹950 – ₹1,600/share Disclaimer: This is purely for educational analysis, not investment advice.
6. What’s Cooking – News, Triggers, Drama
Oh boy, the news section is a buffet.
November 2025: KSSL bags MoD contracts >₹2,500 Mn, to be delivered by November 2026. Nothing like a little howitzer to fire up quarterly morale.
October 2025: Bharat Forge to supply fan blades for Rolls-Royce Pearl 700 and 10X
