Bharat Forge Q2 Review: Brokerages Stay Cautious Despite Strong Quarter — Here's Why

Shares of Bharat Forge Ltd. are in focus on Wednesday's trade, after the company reported strong financials for the September quarter.

The defence major's profit rose 23% to Rs 299.20 crore in the second quarter of this financial year. This is in comparison to profit of Rs 243.59 crore in the previous quarter of this fiscal.

The company secured new orders worth Rs 1,582 crore including Rs 559 crores in defence in first half of this financial year. As of the first half of this fiscal, the defence order book stood at Rs 9,467 crores.

Indian manufacturing, a key focus area and growth driver for the company registered revenues of Rs 2,746 crore and Ebitda of Rs 676 crore.

Brokerages remain cautious on Bharat Forge, even as they revise price targets upward.

Jefferies maintained an 'underperform' rating and raised its target price to Rs 1,050 from Rs 950. The brokerage flagged that while growth is being led by subsidiaries, defence order execution has been delayed: a large guns order will now take three years instead of two.

CLSA also kept an 'underperform' rating, increasing its target price to Rs 1,180 from Rs 1,010, calling it a stable quarter. Export revenue fell, but execution outside the standalone business improved. Despite weaker revenue due to tariffs, margins surprised on the upside, helped by better utilisation at subsidiaries.

JPMorgan stayed neutral with a target price of Rs 255, saying the current stock price already bakes in a strong FY27 recovery. The firm pointed out ongoing headwinds in North American and European exports, offset by quicker-than-expected margin expansion across overseas and India subsidiaries. However, JPMorgan believes the stock lacks margin of safety in a volatile environment.