Bharat Forge Limited — Q4 FY26 earnings call

Call held 7 May 2026

Management summary

Bharat Forge delivered robust consolidated performance in FY26, with double-digit revenue growth and healthy EBITDA. While standalone results were impacted by North American market headwinds, Q4 saw a strong sequential recovery. The company is strategically expanding its high-growth defense and aerospace segments, making targeted acquisitions like Fortuna Engineering, and undertaking restructuring of underperforming overseas assets and e-mobility investments to streamline operations and focus on profitable growth.

Highlights

  • Consolidated revenue for FY26 grew 11% to ₹16,812 crores.

  • Consolidated EBITDA for FY26 grew 6% to ₹2,921 crores.

  • Q4 FY26 standalone revenue improved 8.5% QoQ to ₹2,260 crores, driven by recovery in exports and strong domestic automotive performance.

  • Secured new businesses worth ₹4,814 crores in FY26, with Defence contributing ₹2,816 crores.

  • Aerospace business is now a meaningful part of industrial exports, contributing almost 26% of Q4 non-Auto exports and targeting ₹1,000 crores in revenue.

Concerns

  • Standalone revenue for FY26 was lower by 5% YoY at ₹8,396 crores, mainly due to regulatory uncertainties in North America and demand challenges in the U.S. CV market.

  • Standalone PBT before exceptional items for FY26 was ₹1,826 crores, about 8% lower YoY.

  • Overseas EU operations reported a low EBITDA margin of 4% and U.S. operations at 3.5% for FY26.

  • The company decided to write-off investments in e-mobility where immediate revenue and business ramp-up were not foreseen.

  • Energy costs remain a significant issue, requiring negotiations with customers for compensation.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹16,812 Cr
    YoY +11%
  • Consolidated EBITDA
    ₹2,921 Cr
    YoY +6%
  • Standalone Revenue
    ₹8,396 Cr
    YoY -5%
  • Standalone EBITDA Margin
    27.5%

Q4

  • Standalone Revenue
    ₹2,260 Cr
    QoQ +8.5%
  • Standalone EBITDA Margin
    27%

What they filed

Q1 FY27: revenue up 18.7%, net profit down 131.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,689 3,476 3,853 3,909 4,032 +9%4,343 +25%4,528 +18%4,640 +19%
EBITDA647 623 679 670 724 +12%746 +20%777 +14%698 +4%
Net profit243 213 283 284 299 +23%273 +28%233 −18%-90 −132%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹7,361 Cr Total
  • EU Operations ₹3,865 Cr 52.5%
  • Defense (FY26) ₹1,562 Cr 21.2%
  • U.S. Operations ₹1,534 Cr 20.8%
  • Aerospace (FY26) ₹400 Cr 5.4%

Order book

high confidence

Total value

₹11,000 Cr

as of 2026-03-31 quantified

Execution

executable over next 3-4 years

Composition

Mix 4 segments
  • Defence ₹2,816 Cr 58.4%
  • Traditional Business ₹1,210 Cr 25.1%
  • JSA (Casting Unit) ₹292 Cr 6.1%
  • K-Drive ₹500 Cr 10.4%

Share of order book by segment, derived from disclosed amounts

The company secured new businesses worth INR 4,814 crores in FY26 and has a defense order book of INR 11,000 crores for the next 3-4 years, indicating stable revenue accretion.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹800 Cr New plan
    • Forging, casting and products platform ₹800 Cr
    Our ongoing capex programs across forging, casting and products platform will translate into INR800 crores to INR850 crores capex in a 15, 18-month period.
  • Debt Debt disclosed
    Consolidated net debt-to-equity stood at 0.41x as of March 2026. ... Balance sheet continues to remain robust with net debt-to-equity at 0.18x for the year.
  • M&A Fortuna Engineering Acquisition · Closed · Consideration ₹[object Object] (cash)

    Strategic and complementary fit for machining connecting rods and high-value components, enabling quantum growth and addressing new segments.

    Fortuna has a net cash position of about INR 20 crores and operates at mid-teen margins.

    This week, we acquired a 30% stake in Fortuna Engineering, which is a company based in Nashik. This has a strong and experienced management team led by the promoters in machining. And it strategically is a very complementary fit to us because they do machining of connecting rods and some other high-value components, which are all complementary to what Bharat Forge does. ... So we have acquired 30% for INR 130 crores. The company has a revenue of about INR380 crores, and they have a net cash position of about INR20-odd crores. ... It's in the mid-teens.

Guidance & targets

Volume

  • India business growth Volume · FY27 · High confidence close to 25%
    Barring any further geopolitical crisis and their impact on demand, we should see a close to 25% growth in our India business.

    — Amit Kalyani

  • K-mobility business growth Volume · next 3-4 years · High confidence 2X
    Yes, there is. In 2X in, next 3 to 4 years is definitely possible. And with -- if we are a little more lucky and we get into some specialty axles, it could be even better.

    — Amit Kalyani

Revenue

  • Aerospace business revenue Revenue · sooner than later · High confidence INR 1,000 crores
    I would say the margins are above company average. And if you remember, Mr. Jain, that over the last 3 years, we had said the first goal is to get to INR500, INR600 crores, INR700 crores and then get to INR1,000 crores. I think I think that we are on that trajectory. And sooner than later, we should cross that and then be on a very fast growth path after that.

    — Amit Kalyani

  • Data center orders ramp-up Revenue · FY27 · Medium confidence ramp up next year
    And some of the data center orders will also start slowly from towards the third quarter, fourth quarter and then really ramp up next year.

    — Amit Kalyani

Margin

  • K-mobility business margins Margin · Medium confidence mid-teens
    I think it's too early to say, but our goal is a to do mid-teens margin in this business.

    — Amit Kalyani

Capacity

  • Explosives facility production start Capacity · Medium confidence ~24 months
    And then another 6 to 8 months on then, we should be able to start pilot production. We are talking about roughly 24 months.

    — Amit Kalyani

Restructuring

  • German steel business restructuring completion Restructuring · High confidence end of next calendar year
    We expect to complete the process by end of next calendar year.

    — Kedar Dixit

Production

  • ATAGS production start Production · H2 FY26 · High confidence H2 this year
    So the first thing that you should look at is the fact that the ATAGS FOPM will happen, and then the ATAGS production will start and ramp up.

    — Amit Kalyani

  • CQB carbine production start Production · H2 FY26 · High confidence H2 this year
    The second is the CQB carbine also production will happen. So those are the two big milestones that will move the needle starting this year, and then it will continue next year and year after next as well.

    — Amit Kalyani

What to watch in Q1 FY27

ATAGS & CQB Carbine Production Start

H2 FY26
Current Testing completed, production to start H2 FY26
Target Production and supplies commenced

Why it matters

Indicates commencement of revenue generation from significant defense orders.

So the first thing that you should look at is the fact that the ATAGS FOPM will happen, and then the ATAGS production will start and ramp up. The second is the CQB carbine also production will happen. So those are the two big milestones that will move the needle starting this year, and then it will continue next year and year after next as well.

Risks & concerns

  • Regulatory uncertainties in North America

    medium

    Impacted standalone revenue for FY26, causing a 5% YoY decline.

    Management acknowledged

  • Demand challenges in U.S. CV market

    medium

    Contributed to the 5% YoY decline in standalone revenue for FY26.

    Management acknowledged

  • Geopolitical crisis (Middle East, Europe)

    medium

    Caused uncertainty in markets, imports, and transportation, but the company weathered the storm well.

    Management acknowledged

  • High energy costs

    medium

    The biggest issue on cost, requiring negotiations with customers for compensation.

    Management acknowledged

  • EV adoption trajectory

    medium

    Not as anticipated globally, leading to write-offs of e-mobility investments due to lack of immediate revenue ramp-up.

    Management acknowledged

Q&A highlights

8 direct
Electrification Strategy Recalibration Direct
About 5 years ago, there was a very strong focus on electrification across the Board, including commercial vehicles, including heavy commercial vehicles. However, it is definitely not seeing the same kind of trajectory as what was anticipated.

Management explained the rationale behind the e-mobility investment write-offs, citing a global recalibration of EV strategy and challenges faced by large OEMs.

Asked by Kapil Singh

German Subsidiary Restructuring Timeline and Impact Direct
So the restructuring of CDP has started. This is a 15 to 18-month process where we have to meet the customer requirements and also do a solvent liquidation of the company. We anticipate the losses will reduce because the CDP losses are not going to be there.

Management provided a clear timeline for the completion of the German steel business restructuring and confirmed that it would lead to a reduction in losses from overseas subsidiaries.

Asked by Binay Singh

Aerospace Business Outlook and Margins Direct
I would say the margins are above company average. And if you remember, Mr. Jain, that over the last 3 years, we had said the first goal is to get to INR500, INR600 crores, INR700 crores and then get to INR1,000 crores. I think I think that we are on that trajectory. And sooner than later, we should cross that and then be on a very fast growth path after that.

Management confirmed that aerospace margins are above company average and reiterated an ambitious revenue target of INR 1,000 crores, indicating strong growth potential in this segment.

Asked by Nitin Jain

Fortuna Engineering Acquisition Rationale and Financials Direct
So Pramod the reason of acquiring this entity is, it is very synergistic to what we do today. And we also cannot do everything at once. We need the bandwidth to be able to grow in a quantum manner. ... It's in the mid-teens.

Management clarified the strategic fit and financial benefits of the Fortuna acquisition, highlighting its synergistic nature, growth potential, and mid-teen margins.

Asked by Pramod Amthe

Explosives Facility Development Timeline Direct
So our goal is to breakdown this month and start the preparatory work. And then once we get our approvals, start construction by the end of this year. And that should be ready in less than 15 months. And then another 6 to 8 months on then, we should be able to start pilot production. We are talking about roughly 24 months.

Management provided a detailed timeline for the establishment and operationalization of the new explosives manufacturing facility, a key development in the defense sector.

Asked by Nitin Arora

JSA Capital Raise Justification Direct
No, that was a minor thing actually, and honestly, we see a large opportunity in JSA. We wanted to make it an independent business and grow it because we see that the business could become a multi-thousand crore business per year. If you see the biggest ingredients in that industry are energy and raw material, and both those factors are not available in required quantity or price in Europe. So we see a large opportunity to move that manufacturing into India.

Management explained the strategic necessity of the capital raise for JSA, emphasizing the goal of making it an independent, multi-thousand crore business leveraging India's manufacturing advantages.

Asked by Sonal Gupta

Defense Order Execution Milestones Direct
So the first thing that you should look at is the fact that the ATAGS FOPM will happen, and then the ATAGS production will start and ramp up. The second is the CQB carbine also production will happen. So those are the two big milestones that will move the needle starting this year, and then it will continue next year and year after next as well.

Management outlined specific, near-term milestones for the defense business, including ATAGS and CQB carbine production, which are critical for revenue accretion.

Asked by Binay Singh

K-mobility Business Growth and Margins Direct
We are looking at the specialty axles business and the LCV and SUV axle business, including EV, for those. Both ICE and EV, so that is what's going to drive the growth there. ... Yes, there is. In 2X in, next 3 to 4 years is definitely possible. ... I think it's too early to say, but our goal is a to do mid-teens margin in this business.

Management provided clear drivers for the K-mobility business, including specific product segments and a strong growth target of 2X in 3-4 years with a mid-teens margin goal.

Asked by Radha

2 min read 5 chapters

Detailed narrative

FY26 Consolidated and Standalone Performance

Bharat Forge reported a consolidated revenue of ₹16,812 crores for FY26, marking an 11% growth, with consolidated EBITDA reaching ₹2,921 crores, a 6% increase. The consolidated net debt-to-equity stood at 0.41x as of March 2026. Standalone revenue for FY26 was ₹8,396 crores, a 5% YoY decline, primarily due to regulatory uncertainties in North America and demand challenges in the U.S. CV market. However, Q4 FY26 standalone revenue showed an 8.5% QoQ improvement to ₹2,260 crores, with an EBITDA margin of 27%.

Strategic Initiatives and Acquisitions

The company secured new businesses worth ₹4,814 crores in FY26, including ₹2,816 crores in Defence and ₹500 crores from K-Drive. Bharat Forge acquired a 30% stake in Fortuna Engineering for ₹130 crores, a company with ₹380 crores in revenue and mid-teen margins, strategically complementing its machining capabilities. The aerospace business is now a significant contributor, representing almost 26% of Q4 non-Auto exports and targeting ₹1,000 crores in revenue with above-average margins.

Defense Business Outlook and Milestones

The defense order book stands at ₹11,000 crores, expected to provide stable revenue accretion over the next 3-4 years. Key milestones for FY26 include the commencement of ATAGS FOPM and production ramp-up, as well as CQB carbine production, both expected to start in H2 FY26. The company is also planning to set up an explosives manufacturing facility in Andhra Pradesh, with ground-breaking this month and pilot production targeted within 24 months.

EV Strategy and Overseas Restructuring

Bharat Forge has recalibrated its e-mobility strategy, deciding to write-off investments in areas without immediate revenue ramp-up, acknowledging that global EV adoption has taken a different trajectory than anticipated. The company is also restructuring its German steel business (CDP Bharat Forge), a 15-18 month process expected to conclude by the end of next calendar year, which will reduce losses from overseas subsidiaries and improve overall performance.

Capital Expenditure and Growth Targets

The company plans a capex of ₹800-850 crores over the next 15-18 months, allocated across forging, casting, and products platforms. Management guided for a close to 25% growth in its India business for FY27, driven by growth across sectors and strategic initiatives. The K-mobility business is targeted for 2X growth in the next 3-4 years, with a goal of achieving mid-teen margins, focusing on specialty axles and LCV/SUV segments.

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