Analyst Concall
Bharat Forge eyes growth in US even under tariff regime
This story was originally published at 17:31 IST on 8 May 2025
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--Bharat Forge: Seeing 15-20% growth in operations in FY26
--CONTEXT: Bharat Forge mgmt's comments in post-earnings call with analysts
--Bharat Forge: Hope to conclude axle contract in US by June-end
--Bharat Forge: Going to increase focus on automotive electronics
--Bharat Forge: Share of electronic components in automotive products rising
--Bharat Forge: Ramping up steel, aluminium capacity in US
--Bharat Forge: See strong order book in US in tariff regime
--Bharat Forge: See US becoming big mkt for our aerospace business
By Ashutosh Pati and Avishek Rakshit
MUMBAI/KOLKATA – Bharat Forge Ltd. does not expect the US tariffs on steel and aluminium to have an immediate impact on its operations in that country, the company's management said in a post-earnings call with analysts and investors. In fact, the company is eyeing the US as a growth market in the near future even under the tariff regime and will pass on the impact of tariffs to consumers.
"...we are producing steel and aluminum components in the US. We buy our steel locally. And we also produce our alloy aluminium in house by buying aluminium ingots. So I think that in general, we don't have an impact (from tariffs) and whatever impact we have will be passed off," the company's management said.
Bharat Forge expects a strong order book in the US even under the new tariff regime and is ramping up its existing capacity for both steel and aluminium. The company is eyeing a 15-20% growth in its operations in the financial year 2025-26 (Apr-Mar).
The company is also eyeing the US as a big market for its aerospace segment. Currently, its aerospace business is largely based in Europe and the growth in this segment is coming from non-US markets. The company's management said that they are expecting the acquisition of 100% stake in AAM India Manufacturing Corp. Pvt. Ltd. to be completed by the end of June. AAM India, a subsidiary of American Axle & Manufacturing Holdings Inc., manufactures axles for light, medium, and heavy commercial vehicles in India.
Bharat Forge said that electronics are going to be a critical part of the overall industrial landscape, as the share of electronics as a percentage of total vehicle value is rising dramatically. The company plans to focus on this segment and grow its operations.
"...so if you want to be in electronics, you can't only be in one or two areas. You need to build scale, you need to build supply chain capability. I think we're going to do that in multiple areas. And the Indian government wants to create Indian electronics players in niche areas where imports are not wanted to be used. So I think there is an opportunity and that's what we're pursuing," the company's management said.
Bharat Forge reported an 11% on-year fall in its net profit to INR 3.46 billion in the March quarter, significantly lower than Street's estimates. Its revenue from operations fell a little over 7% on year to INR 21.63 billion in the reporting quarter. On Thursday, shares of the company closed 2.4% lower at INR 1,113.4 on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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