Bharat Forge hosted its Q3 and 9 Months FY ’26 Earnings Call on February 12, 2026, where management detailed strong sequential growth and provided outlooks across key segments. Standalone revenues rose 7% sequentially, while consolidated revenues reached INR4,343 crores for the quarter. Management expressed strong confidence, suggesting the worst is behind them, driven by momentum in the domestic auto sector and significant traction in the defense business.
Q3 & 9 Months FY ’26 Financial Summary
During the conference call held on February 12, 2026, Kedar Dixit, CFO, highlighted robust financial performance. Standalone revenues grew 7% sequentially to approximately INR2,084 crores, with EBITDA reaching INR569 crores (a 4.6% QoQ growth), achieving a margin of 27.3%. This included a INR31 crore tariff cost impact.
On a consolidated basis, Q3 revenues stood at INR4,343 crores with an EBITDA margin of 17.3%. For the nine-month period, consolidated revenue was INR12,284 crores with an EBITDA margin of 17.5%. The balance sheet remains strong, with the net debt to equity ratio standing at only 0.15.
Segment Performance and Business Drivers
The standalone performance was bolstered by strong domestic automotive growth and execution in the defense order book. However, destocking in the North American truck market negatively impacted export revenues. Domestically, while the auto sector saw a 13% downturn, the industrial segment grew sharply by 11%, primarily due to improved business in Oil & Gas and Aerospace.
Overseas Subsidiaries: European operations remained stable with 60% to 65% utilization, recording an EBITDA of INR39 crores. US Aluminum recorded an EBITDA of about INR10 crores, though profitability was impacted by aluminum tariffs.
Subsidiary Highlights: The casting business, JSA, showed strong growth, with top line and EBITDA rising by 22% and 39%, respectively. The recent acquisition, K Drive, saw EBITDA jump from 3% to about 5%.
In the last quarter, the company secured INR2,388 crores in new business across all key segments, with defense contributing INR1,878 crores.
Management Commentary and Outlook
Vice Chairman and Joint Managing Director, Mr. Amit Kalyani, expressed confidence that the worst is behind them, noting structural improvements and new product development. Key points from management included:
- Domestic Auto Momentum: The CV sector for Q4 India looks very strong and is expected to continue into the first half of next year.
- Defense Upside: Management foresees a strong uptick driven by the commencement of the ATAGS order and CQB carbine production, expecting 30%-40% plus growth next year. Defense has the potential to grow to be as large as the overall business someday.
- Export Recovery: Exports are expected to have bottomed out, with gradual improvement anticipated moving forward.
- JSA Valuation: The acquisition of JSA three years ago has proven successful, with Premji Invest taking a stake valued at INR1,300 crores, resulting in a valuation multiple of three and a half to four times the initial investment.
- European Restructuring: Management acknowledged the ongoing need to assess restructuring options for the European steel business, stating decisions on profitability will guide future actions.
Q&A Highlights: Future Growth Vectors
Discussions during the Q&A session focused heavily on future growth areas:
Defense Scaling: Management suggested that defense, currently less than 10% of revenues, could realistically move toward 18%-20% or even 30% over the next two to three years, given strong global defense budget growth.
Kalyani Group Project: Clarification was sought regarding the announced INR17,000-odd crores project in Odisha, to be implemented by Kalyani Steel, Saarloha, and Bharat Forge. Bharat Forge’s specific capex allocation is set at up to INR3,000 crores, with initial major work (specialty steel plant by Kalyani Steel) starting after environmental clearances, but not within the immediate next 1 year.
American Axle Performance: The acquisition has performed well, with margins growing by almost 200 basis points. Management confirmed the segment is gaining market share, promising quantification next quarter.
Server Business: Development of server products, tied up with global leaders, remains in the development phase.
Source: BSE
