Bharat Forge hits 52-week high after posting Q3; most brokerages hike TP

Bharat Forge's share price hit a 52-week high of ₹1,784.7, gaining 1 per cent on the BSE in Friday’s intra-day trade in an otherwise weak market on a healthy business outlook. In comparison, the BSE Sensex was down 1 per cent at 82,827 at 10:16 AM.

 

The stock price of the auto parts company was quoted higher for the fifth straight day, surging 15 per cent during the period. It is quoting close to its all-time high level of ₹1,826.20 touched on June 21, 2024.

What’s driving Bharat Forge's stock price?

Looking ahead into the March 2026 quarter (Q4FY26) and the financial year 2026-27 (FY27), the management said that the worst is behind the company and things are starting to look up. With both domestic and export markets looking strong across sectors, and the commencement of Advanced Towed Artillery Gun System (ATAGS) execution in H2FY27, the management expects high double-digit top-line growth and commensurate impact on profitability.

 

In the December 2025 quarter (Q3FY26), Bharat Forge secured new orders worth ₹2,388 crore, including ₹1,878 crore in Defence. As of December 31, 2025, the defence order book stood at ₹11,130 crore. The company signed the CQB Carbine contract with the Ministry of Defence for the supply of more than 250,000 units to the Indian armed forces. This order unlocks significant growth opportunities for the company’s Small Arms vertical within the Defence business.

Brokerages’ view on Bharat Forge 

Nomura | Neutral | Target raised to ₹1,844 from ₹1,727

Nomura said Bharat Forge’s Q3FY26 consolidated revenue rose 25 per cent Y-o-Y, beating its estimate, led by a sharp 102 per cent Y-o-Y jump in defence revenue, while Earnings before interest, tax, depreciation and amortisation (Ebitda) margin came in broadly in line at 17.3 per cent. 

 

Management sounded optimistic, expecting high double-digit growth in Q4 and FY27 on improving domestic and export demand, strong MHCV outlook for the next six months, and a global commercial vehicle (CV) cycle that has bottomed, while highlighting order wins of ₹2,390 crore in the quarter (including ₹1,880 crore in defence) and an expanded defence order book of ₹1,110 crore to be executed over four years; it expects defence to grow 30–40 per cent in FY27E and reach 18–20 per cent of revenue by 2030E, with margins similar to automotive but better return on capital employed (ROCE), alongside very strong aerospace growth over the next two years. 

 

Nomura views the ramp-up in defence and aerospace, improving India MHCV demand, and the India–US trade deal (removing tariff overhang) as key positives, with potential restructuring/shifting of the EU steel business to India as a catalyst; it raised its target price to ₹1,844 by increasing its FY28 EV/Ebitda multiple to 20x, noting the stock trades near fair value at 19x FY28 EV/Ebitda and 31x FY28 P/E, and preferring Sona Comstar, Uno Minda and Motherson Sumi. 

Emkay Global Financial Services | Buy from Add | Target raised to ₹2,000 from ₹1,450

Emkay has upgraded its rating and sharply raised its target price on the backdrop of an expected valuation re-rating as the high-margin defense segment contributes more to the mix. 

 

The brokerage said that the company reported a strong Q3 with consolidated revenue and Ebitda growing 25 per cent and 20 per cent year-on-year (Y-o-Y), respectively, despite some margin pressure from subsidiary consolidation and a gross margin dip in standalone operations. 

 

Emkay believes the "worst is behind" for the company, supported by a robust outlook for Indian CVs post- goods and services tax (GST) cuts, healthy momentum in passenger vehicles (PVs), and a massive ramp-up in the defense business, which is expected to grow 30–40 per cent in FY27 as major orders like the ATAGS and QCB Carbines enter execution. 

 

Additionally, with the North American CV market bottoming out and other industrial verticals showing strength, Bharat Forge anticipates double-digit growth in FY27. The brokerage has modeled an 18 per cent profit after tax (PAT) compound annual growth rate (CAGR) over FY25–28E, noting that defense could contribute 20–30 per cent of total revenue within the next 2–3 years. 

Motilal Oswal Financial Services | Neutral | Target hiked to ₹1,597 from ₹1,342

Motilal Oswal noted that while the outlook has improved, the recent stock rally has largely priced in the positives. The brokerage highlighted that the GST rate cut has revived the domestic auto business, and the US Class 8 cycle appears to have bottomed out, with defense, aerospace, and JSA expected to remain key growth drivers. 

 

Consequently, it raised its FY26–27E earnings per share (EPS) estimates by 8–10 per cent and now forecasts a 15 per cent/17 per cent/31 per cent CAGR in revenue/Ebitda/PAT over FY25–28E. However, with valuations currently at 44.7x FY27E and 36.2x FY28E, Motilal believes the stock is fairly valued at current levels..

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.