Shares of Bharat Forge rose after the company reported a mixed set of third-quarter results, with strong defence execution helping offset weakness in North American commercial vehicle (CV) markets.
In a research note dated 12 February 2026, Batlivala & Karani Securities India Pvt Ltd maintained its “Hold” rating on the stock, while raising its target price to Rs 1,988 from Rs 1,522 earlier, citing improving demand visibility and easing tariff-related pressures.
Standalone revenue for the quarter stood at Rs 20.8bn, marginally below expectations. The shortfall was largely attributed to export weakness stemming from inventory de-stocking and lower production in the North American CV segment. However, robust domestic automotive demand and strong execution of defence orders provided support.
Earnings before interest, tax, depreciation and amortisation (EBITDA) margin declined to 27.3%, impacted by higher employee and other expenses, though lower raw material costs offered partial relief. Adjusted profit after tax came in at Rs 3.3bn, broadly in line with estimates.
Defence momentum and global recovery
Analysts noted that consolidated performance exceeded expectations, aided by strong defence deliveries and a recovery in overseas subsidiaries. Management indicated that the worst of the North American CV cycle may be over, with improving Class 7 and 8 truck order intake and exports expected to recover gradually.
Domestic demand remains resilient, supported by automotive recovery and steady momentum in defence and industrial segments. The company also highlighted strong visibility in defence, including execution of the ATAGS programme and ramp-up in close-quarter battle (CQB) systems production.
Batlivala & Karani Securities revised its revenue growth estimates upward for FY27 and FY28, factoring in easing tariff headwinds and an improving global CV outlook. Margin projections were also increased on expectations of operating leverage and a favourable product mix.
At the current market price of Rs 1,727, the stock trades at 43.1 times FY27 estimated earnings and 33 times FY28 estimates. While the brokerage sees improved prospects across most segments, it has retained a cautious stance, maintaining a “Hold” rating amid valuation considerations.
The outlook remains positive, particularly for defence, aerospace and heavy horsepower engines, which are expected to underpin growth in the coming quarters.
