Bharat Forge falls 9% as Morgan Stanley downgrades stock, cuts target price

Shares of Bharat Forge plunged nearly 9 per cent on Friday -- the worst session in nine months -- after Morgan Stanley downgraded the stock to 'equalweight' from 'overweight' and slashed the target price by 14 per cent. 

 

Morgan Stanley cited that target price and ratings cut to US President Donald Trump's tariffs. According to reports, the brokerage said that the company has scaled its non-auto business well, and with the domestic advanced towed artillery gun system (ATAGS) order win, non-auto revenues could reach 46 per cent of the overall topline in the financial year 2027. "However, the 25 per cent to 27 per cent tariff burden could offset these gains."

 

Morgan Stanley stated that while tariffs on auto and non-auto products are likely to see a gradual pass-through, Bharat Forge may face a near-term margin impact of 200 basis points, according to reports. The brokerage cut the target price from ₹1,366 per share to ₹1170 apice, a potential upside of 13 per cent. 

 

Trump announced tariffs of at least 10 per cent on practically all imports, with higher rates on countries that have the highest trade deficits with the US. India was hit with a 27 per cent import tariff with few sectors like pharmaceuticals and energy sectors being exempted.  

 

The US President exempted reciprocal tariffs on auto and auto parts as a 25 per cent tariff is already in place. "Steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs," a statement from the White House said on Thursday. 

 

Stock movement

 

Bharat Forge’s stock fell as much as 8.83 per cent during the day to ₹1,018.5 per share, the biggest intraday loss since June 4, 2024. The stock pared some losses to trade 7.4 per cent lower at ₹1,033 apiece, compared to a 1.16 per cent decline in Nifty 50 as of 12:20 PM. The stock fell as much as 6.1 per cent on Thursday.  

 

Shares of the company extended gains to their second day on Friday. The stock has fallen by over 15 per cent in the last 14 sessions and has fallen 20 per cent this year, compared to a 2.5 per cent fall in the benchmark Nifty 50. Bharat Forge has a total market capitalisation of ₹49,455.88 crore.

 

The Pune-based Indian multinational is a global provider of high-performance innovative safety and critical components and solutions to various industrial sectors, including automotive railways, power defence construction, mining, aerospace, marine and oil and gas.