Bharat Forge
Bharat Forge
Automobiles F&OKey Fundamentals
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Key Insights
Strengths
2- Company has delivered good profit growth of 38.6% CAGR over last 5 years
- Company has been maintaining a healthy dividend payout of 41.6%
Weaknesses
4- Stock is trading at 9.36 times its book value
- Promoter holding has decreased over last quarter: -0.95%
- Company has a low return on equity of 12.2% over last 3 years.
- Company might be capitalizing the interest cost
Growth Rate
AI Analysis — Bull vs Bear
Bharat Forge Ltd has a market capitalisation of about ₹95,431 crore and trades at a P/E of 136.6 and a P/B of 8.44. Over 5 years it has grown profit at a 38.6% CAGR and sales at a 22% CAGR, but TTM profit fell 2% while TTM sales rose 18%. Return on equity has held at about 12% over the 3-, 5- and 10-year periods, and the stock has returned 70% over the last year, well ahead of recent earnings growth.
- Profit has compounded at 38.6% (about 39%) CAGR over 5 years and 33% over 3 years, a multi-year earnings expansion.
- TTM sales growth of 18% is double the 3-year sales CAGR of 9%, which suggests top-line momentum is picking up.
- The 5-year sales CAGR of 22% is far above the 10-year sales CAGR of 9%, which points to a structurally higher growth phase over the past half-decade.
- The company keeps a dividend payout ratio of 41.6%, returning a meaningful share of earnings to shareholders.
- The stock has returned 21% CAGR over 5 years and 16% CAGR over 10 years, so shareholder returns have compounded over the long term, not just in one recent spike.
- ROE has been steady at about 12% across the last-year, 3-year, 5-year and 10-year periods, which points to consistent capital efficiency through cycles.
- A market capitalisation of about ₹95,431 crore gives the company large-cap scale and liquidity within the automobiles and components space.
- A P/E of 136.6 implies an earnings yield of roughly 0.73%, so the valuation assumes strong future earnings growth.
- TTM profit growth is -2% while TTM sales grew 18%, which suggests margin compression or higher costs below the revenue line.
- The stock is up 70% over 1 year while TTM profit declined 2%, so recent returns have come from multiple expansion rather than earnings growth.
- A P/B of 8.44 (10.0x on another data source) is high relative to an ROE of about 12.2% over 3 years, which leaves limited margin of safety on book value.
- ROE of about 12.2% over 3 years is modest for a company trading above 130x earnings.
- Promoter holding fell 0.95% over the last quarter, which some investors may read as a negative signal.
- The company may be capitalising interest cost, which can flatter reported profit and make earnings quality harder to judge.
- Over 10 years profit has compounded at only 5% and sales at 9%, which highlights cyclicality and suggests the recent 5-year growth rate may not last.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Q1 FY27 swings to net loss Sep 17
Bharat Forge reported a consolidated net loss of ₹90 crore in Q1 FY27, against a ₹284 crore profit a year earlier. The loss came from a one-time exceptional loss of ₹358 crore, mainly a ₹330.42 crore restructuring provision for its German subsidiary BF CDP.
- EBITDA margin misses estimates Sep 17
EBITDA was ₹709.4 crore, below the CNBC TV18 poll estimate of ₹783 crore. The EBITDA margin shrank 170 bps year-on-year to 15.29%, versus the 17% the poll expected, and other income fell 19% to ₹34.3 crore.
- Stretched valuation multiples Sep 23
The stock trades at a PE of 134.27 and a PB of 10.03, with a market cap of about ₹96,048 crore. Return on equity is only 9.28%, so these multiples leave little room for further earnings disappointments.
- Share price weak, below 52-week high Sep 29
The stock fell 13.7% over the month to Sep 10 and closed at ₹1,946 that day. A large trade on Sep 29 went through at ₹1,927, about 16% below the 52-week high of ₹2,295.
- QIP dilution at a discount Sep 23
The QIP issued 1.05 crore new shares at ₹1,890 each. That is below the ₹1,947.70 floor price and a 5.5% discount to the previous close, which dilutes existing shareholders by about 2%.
- ₹2,000 cr QIP, Singapore govt anchors Sep 23
The company raised ₹2,000 crore through the QIP at ₹1,890 per share. The Government of Singapore took the largest allocation, 17.79 lakh shares or 16.8%, while ICICI Prudential funds and Invesco India funds also bought in. The QIP opened Sep 17 and the stock rose 2.59% to ₹1,968.75 that day.
- KSSL-Thales 70mm rocket alliance Sep 3
Subsidiary Kalyani Strategic Systems Ltd (KSSL) signed a strategic alliance with Thales to transfer technology and locally produce unguided and laser-guided 70mm rockets. These rockets are already used by the Indian Armed Forces, and the first fully India-made rocket is targeted for early 2027.
- Pratt & Whitney HALE UAV tie-up Sep 15
Bharat Forge will lead engine-airframe integration for turboprop engines from Pratt & Whitney Canada in DRDO's high-altitude, long-endurance (HALE) drone programme. Management expects the aerospace business to double over the next two years, building on a ₹4,258 crore Ministry of Defence contract won in June 2026.
- Jefferies names it a top pick Sep 7
Jefferies picked Bharat Forge and Sona BLW as its preferred auto-component stocks. It noted auto ancillaries grew EBIT 19% year-on-year in Q1, compared with 10% for vehicle makers (OEMs).
- FN Herstal small arms MoU Sep 3
KSSL signed an MoU with FN Herstal to look at setting up an Indian production centre and a possible joint venture. The scope covers small arms, integrated weapon systems and counter-drone systems.
- Revenue growth beats estimates Sep 17
Q1 FY27 consolidated revenue grew 18.7% year-on-year to ₹4,640 crore, ahead of the ₹4,591 crore poll estimate. The stock is up 55-60% over one year.
- German subsidiaries merged Sep 10
Bharat Forge Holding GmbH was merged into Bharat Forge Global Holding GmbH, effective Aug 25, 2026, to simplify the German legal structure. The company said there is no financial or shareholding impact.
- Refu Drive JV stake exited Sep 2
Kalyani Powertrain sold its 50% stake in Refu Drive GmbH to its partner Refu Elektronik for EUR 12,500. This removes a JV that had a negative net worth of EUR 3.23 million.
- Singapore investor meetings Sep 3
Management held group meetings with institutional investors in Singapore on Sep 8, 2026, without sharing unpublished price-sensitive information. The meetings came just before the QIP launched.
- ₹21.69 cr block trade Sep 29
About 1,12,562 shares changed hands on NSE at ₹1,927 in a large trade worth ₹21.69 crore. This was a scanner signal and has not been confirmed by the exchange.
TL;DR: Bharat Forge's main strength is defence and aerospace: it has the Thales, FN Herstal and Pratt & Whitney partnerships, a ₹4,258 crore defence order, and fresh capital from a ₹2,000 crore QIP backed by Singapore's government. On the other side, Q1 FY27 swung to a ₹90 crore loss on German restructuring charges, margins shrank 170 bps to 15.29%, and the stock trades at a PE above 130 while sitting well below its ₹2,295 high. The near-term trend is mixed and slightly weak, but the long-term story is getting better as defence wins pile up. A re-rating will likely depend on margins recovering once the overseas restructuring costs ease in the coming quarters.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 3,877 | 3,774 | 3,866 | 4,164 | 4,106 | 3,689 | 3,476 | 3,853 | 3,909 | 4,032 | 4,343 | 4,528 | 4,640 |
| Expenses | 3,282 | 3,153 | 3,169 | 3,521 | 3,365 | 3,042 | 2,853 | 3,174 | 3,239 | 3,308 | 3,597 | 3,751 | 3,942 |
| Operating Profit | 595 | 621 | 698 | 643 | 741 | 647 | 623 | 679 | 670 | 724 | 746 | 777 | 698 |
| OPM % | 15% | 16% | 18% | 15% | 18% | 18% | 18% | 18% | 17% | 18% | 17% | 17% | 15% |
| Other Income | 67 | 51 | 58 | 45 | -99 | 62 | 38 | 57 | 50 | 54 | -13 | -46 | -301 |
| Interest | 114 | 124 | 137 | 116 | 124 | 110 | 96 | 88 | 82 | 80 | 77 | 84 | 90 |
| Depreciation | 206 | 211 | 224 | 207 | 218 | 213 | 218 | 224 | 226 | 241 | 249 | 255 | 263 |
| PBT | 341 | 337 | 395 | 366 | 300 | 385 | 347 | 424 | 411 | 457 | 407 | 392 | 44 |
| Tax % | 37% | 36% | 36% | 38% | 42% | 37% | 39% | 33% | 31% | 34% | 33% | 40% | 302% |
| Net Profit | 214 | 215 | 254 | 227 | 175 | 243 | 213 | 283 | 284 | 299 | 273 | 233 | -90 |
| EPS in Rs | 4.8 | 4.88 | 5.68 | 5.07 | 4.36 | 5.23 | 4.45 | 5.9 | 5.93 | 6.26 | 5.53 | 4.86 | -1.88 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 7,622 | 6,809 | 6,396 | 8,358 | 10,146 | 8,056 | 6,336 | 10,461 | 12,910 | 15,682 | 15,123 | 16,812 | 17,543 |
| Expenses | 6,232 | 5,397 | 5,276 | 6,635 | 8,098 | 6,984 | 5,504 | 8,478 | 11,174 | 13,121 | 12,431 | 13,894 | 14,597 |
| Operating Profit | 1,390 | 1,413 | 1,121 | 1,723 | 2,048 | 1,072 | 832 | 1,983 | 1,737 | 2,562 | 2,692 | 2,917 | 2,946 |
| OPM % | 18% | 21% | 18% | 21% | 20% | 13% | 13% | 19% | 13% | 16% | 18% | 17% | 17% |
| Other Income | 226 | 148 | 391 | 46 | 199 | 109 | -138 | 288 | 124 | 217 | 55 | 44 | -306 |
| Interest | 136 | 116 | 100 | 107 | 127 | 171 | 108 | 160 | 299 | 491 | 417 | 323 | 331 |
| Depreciation | 362 | 453 | 452 | 467 | 521 | 548 | 612 | 730 | 736 | 848 | 874 | 971 | 1,008 |
| PBT | 1,118 | 992 | 960 | 1,196 | 1,599 | 462 | -25 | 1,381 | 827 | 1,439 | 1,456 | 1,667 | 1,301 |
| Tax % | 32% | 32% | 26% | 37% | 35% | 24% | 399% | 22% | 39% | 37% | 37% | 35% | — |
| Net Profit | 760 | 675 | 711 | 754 | 1,033 | 349 | -127 | 1,077 | 508 | 910 | 913 | 1,089 | 716 |
| EPS in Rs | 16.38 | 14.57 | 15.13 | 16.38 | 22.17 | 7.51 | -2.71 | 23.23 | 11.35 | 20.43 | 19.69 | 22.58 | 14.77 |
| Div. Payout % | 23% | 26% | 25% | 27% | 23% | 47% | -74% | 30% | 62% | 44% | 43% | 38% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 47 | 47 | 47 | 93 | 93 | 93 | 93 | 93 | 93 | 93 | 96 | 96 |
| Reserves | 3,398 | 3,367 | 4,070 | 4,559 | 5,283 | 5,127 | 5,322 | 6,478 | 6,612 | 7,077 | 9,158 | 9,484 |
| Borrowings | 2,546 | 3,375 | 3,124 | 3,257 | 4,029 | 4,469 | 5,271 | 5,972 | 7,313 | 7,948 | 6,698 | 7,309 |
| Other Liabilities | 2,245 | 1,504 | 1,600 | 2,068 | 2,173 | 1,793 | 2,402 | 2,950 | 4,216 | 4,066 | 4,017 | 5,350 |
| Total Liabilities | 8,236 | 8,292 | 8,841 | 9,977 | 11,578 | 11,482 | 13,088 | 15,492 | 18,235 | 19,184 | 19,968 | 22,238 |
| Fixed Assets | 2,629 | 3,134 | 3,277 | 3,500 | 3,625 | 4,002 | 4,750 | 4,870 | 6,161 | 6,309 | 6,627 | 8,215 |
| CWIP | 870 | 409 | 453 | 344 | 831 | 1,143 | 900 | 1,125 | 701 | 991 | 1,732 | 1,298 |
| Investments | 496 | 886 | 1,192 | 1,501 | 1,524 | 1,618 | 2,607 | 2,604 | 2,569 | 1,849 | 2,063 | 1,738 |
| Other Assets | 4,242 | 3,863 | 3,919 | 4,632 | 5,599 | 4,720 | 4,831 | 6,893 | 8,804 | 10,034 | 9,547 | 10,987 |
| Total Assets | 8,236 | 8,292 | 8,841 | 9,977 | 11,578 | 11,482 | 13,088 | 15,492 | 18,235 | 19,184 | 19,968 | 22,238 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 1,035 | 1,356 | 1,052 | 967 | 911 | 1,522 | 1,020 | 506 | 1,294 | 1,664 | 1,796 | 1,487 |
| Investing | -467 | -888 | -737 | -722 | -1,196 | -1,114 | -1,511 | -690 | -1,666 | -665 | -1,964 | -1,038 |
| Financing | -360 | -448 | -401 | -314 | 368 | -381 | 578 | 310 | 280 | -203 | -570 | -442 |
| Net Cash Flow | 208 | 19 | -86 | -69 | 83 | 26 | 87 | 126 | -91 | 796 | -738 | 6 |
| Free Cash Flow | 326 | 465 | 408 | 399 | -220 | 565 | 129 | -459 | 325 | 164 | 352 | 374 |
| CFO/OP | 104 | 118 | 118 | 79 | 71 | 164 | 134 | 43 | 99 | 85 | 89 | 70 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 41 | 75 | 77 | 85 | 77 | 68 | 81 | 75 | 87 | 74 | 70 | 85 |
| Inventory Days | 131 | 142 | 161 | 151 | 160 | 177 | 249 | 235 | 191 | 159 | 198 | 195 |
| Days Payable | 144 | 119 | 127 | 148 | 118 | 105 | 167 | 141 | 132 | 112 | 130 | 144 |
| Cash Conversion Cycle | 28 | 98 | 111 | 88 | 119 | 140 | 163 | 169 | 147 | 121 | 138 | 136 |
| Working Capital Days | 40 | 11 | -8 | 6 | 15 | -15 | -49 | -24 | -39 | -46 | -27 | -12 |
| ROCE % | 21% | 17% | 13% | 18% | 20% | 7% | 3% | 11% | 8% | 13% | 12% | 13% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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Company Information
Bharat Forge is engaged in the manufacturing and selling of forged and machined components for the auto and industrial sectors.[1]
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