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News Topical, Digital Desk : Bharat Forge Ltd. shares have risen more than 12% in the past month, but UBS says the stock could now see a sharp decline. In a report released on Monday, November 17, brokerage UBS maintained a "SELL" rating on the company. However, it raised its price target to ₹1,230, implying a downside of approximately 12% from the current price.
Expectations of improvement in Q4
UBS stated that Bharat Forge's management commentary suggests a weak third quarter, with a recovery expected in the fourth quarter. In its second quarter results, the company saw weakness in the auto segment, while the defense business remained strong. Margins improved due to cost control.
The company's bet on defense Bharat Forge expects its aerospace business to show strong growth of 40% in FY26 and continue to grow at this pace for the next 3–4 years. The company's defense business currently contributes 10–12% to total revenue. Management aims to increase this to the mid-20s by FY30. The company's defense order book stands at ₹1,100 crore, excluding the domestic carbine order worth ₹140 crore.
Challenges in exports, weak demand from the US Bharat Forge has warned that exports to the North American market are weakening further in the second half of FY26 as demand conditions remain challenging. According to UBS, the company's near-term outlook is weak, and management is now pursuing an India-focused expansion strategy. The company is also focusing on inorganic growth opportunities. Baba Kalyani, Chairman and MD of Bharat Forge, had said, "We are shifting our strategy towards an India-focused business, as we believe India will be the fastest-growing market for the next 15–20 years."
Share Status Bharat Forge shares were trading 0.1% higher at ₹1,398.5 at 10:25 am on Monday. The stock has gained 12.7% in the past month.
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