Bharat Forge slips 3% on cautious US export outlook; Buy, sell or hold?

Bharat Forge share price slipped 3.1 per cent after management expressed caution regarding its US export prospects

Bharat Forge shares slipped 3.1 per cent on Thursday, August 7, 2025, and logged an intra-day low at ₹1,103 per share on BSE. The selling pressure came a day after management expressed caution regarding its US export prospects

 

At 9:25 AM, Bharat Forge's share price was down 1.95 per cent at ₹1,116.6 per share. In comparison, the BSE Sensex was 0.23 per cent lower at 80,356.31. 

Bharat Forge Q1 results recap

In Q1, Bharat Forge's consolidated net profit increased 62 per cent to ₹283.87 crore, as compared to ₹174.57 crore a year ago. 

 

The revenue from operations stood at ₹3,908.7 crore, as compared to ₹4,106.1 crore, down 4.8 per cent, due to challenges arising from the tariff policy, rollback of emission norms change for heavy trucks in US, and seasonality in the Aerospace business.

 

 

The company reported an Earnings before interest, tax, depreciation and amortisation (Ebitda) at ₹587.8 crore, as compared to ₹657.6 crore year-on-year (Y-o-Y). Ebitda margins stood at 27.9 per cent, according to the filing.   Check List of Q1 results today

Bharat Forge management commentary 

"Given the recent tariff announcement by the US government and changes to emission regulation in North America, we are "cautious" on the outlook for the US export business for the remainder of the fiscal," said B.N. Kalyani, chairman & managing director, Bharat Forge.

 

He added: FY26 is likely to be a challenging period, given where we are in the overall cycle and our geographical exposure. Our focus is on capturing opportunities in businesses and geographies which are relatively unaffected and work simultaneously on cost optimisation to minimise impact of operating deleverage.

What brokerages suggest on Bharat Forge post Q1?

Nuvama Institutional Equities has raised its target price to ₹1,280 per share from ₹1,230 with a 'Hold' rating. The brokerage believes core segments such as commercial vehicles (CVs) and global construction equipment/tractors are likely to be weak, limiting standalone revenue/Ebitda compound annual growth rate (CAGR) at 7 per cent/6 per cent over FY25–28E. Moreover, it reckons subsidiaries shall incur losses.

 

Conversely, global brokerage Jefferies has maintained an 'Underperform' rating on Bharat Forge with a target of ₹950 per share, according to data compiled by Bloomberg. The brokerages see Q1 as a tough quarter for Bharat Forge with weakness in the export outlook, according to reports.   Motilal Oswal has also retained its 'Neutral' rating but has cut the target to ₹1,060 per share, from ₹1,230. Given the weak 1Q performance and an expected weak outlook for most of its key segments, the brokerage has lowered its FY26/FY27 earning per share (EPS) estimates by 12 per cent/ 15 per cent. Management has noted that FY26 is likely to be challenging amid tariff-led

uncertainties and changes in emission regulation in North America. "Given these factors, the stock at 44x/34.4x FY26E/FY27E consolidated EPS appears fairly valued," Motilal noted.  Yes Securities has also cut its target price to ₹1,266 per share from ₹1,351 earlier. The brokerage has also downgraded the stock to 'Add' from 'Buy'. To factor in for prevailing macro uncertainty, Yes Securities cut FY26/27E EPS by 11.5/5 per cent. While it expects sharp defence ramp-up in rest of FY26, tariff challenges to aggravate weakness in auto and industrial vertical. The recent correction in the stock though partially factors in near-term challenges.