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Informist, Monday, Aug. 10, 2026

 

--Bharat Forge: Faced indirect impact of manpower challenge in Q1
--CONTEXT: Comments by Bharat Forge mgmt in post-earnings analyst call
--Bharat Forge: Expect navy to be big customer for co going forward
--Bharat Forge: Raising funds to invest in large engine ops, powergens
--Bharat Forge: Raising funds to invest in semiconductors, aerospace ops
--Bharat Forge: Building capacity slightly ahead of demand
--Bharat Forge: Will incur roughly INR 18 billion capex in FY27
--Bharat Forge: Manpower challenge not completely solved yet
 

By Anand JC and Astha Oriel

 

MUMBAI/NEW DELHI – Bharat Forge Ltd. plans to divert part of its freshly approved fundraising of up to INR 25 billion towards new businesses such as the large engine sector, powergen market, semiconductor components, aerospace and a few others, including an investment in an energetics plant in Andhra Pradesh, a senior company official told analysts in a post-earnings conference call Monday. Part of these new funds will be used towards the hardcore manufacturing sectors it is already present in.

Monday, its board approved raising of up to INR 25 billion by issuing new equity shares, convertible securities, or any other securities through qualified institutional placement, preferential allotment, or any other method approved by shareholders. "This capex is something that we will complete over the next 18 months, and it will give us a high capital output ratio as well as good margins and will allow us to accelerate our growth going forward," the official said. 

 

In Andhra Pradesh, Bharat Forge plans to invest in a shell-filling plant that is used in defence applications. "Initially, we are setting up a facility to manufacture and fill a certain amount of shells. But this is a modular facility, so you keep adding lines; you can add, fill more and more shells," the official said. Bharat Forge has applied for a licence, but hasn't received one yet. 

 

The company has outlined plans for capital expenditure of INR 18 billion in 2026-27 (Apr-Mar). These funds will be spent on both automotive and non-automotive businesses. In the automotive business, it will spend on forging and machining. In the non-automotive business, it'll spend on ring-rolling and machining. Bharat Forge expects these investments to lead to good margins.

 

"One of the things is that we are going back to building capacity slightly ahead of demand," the official said. "But the demand is coming so fast that we need to accelerate our capacity build-up as well. That's really why we're increasing our capex to build up this capacity in our traditional business as well," he said.

 

For the June quarter, Bharat Forge reported a net profit of INR 3.21 billion on revenue of INR 23.47 billion. On a consolidated basis, it reported a loss of INR 897.27 million on revenue of INR 46.40 billion.

 

"There were a lot of challenges (in the June quarter), especially the most unexpected and difficult challenge was the one on manpower, which once the Iran war started and the LPG crisis hit, a lot of the contract and migrant labour all travelled back to their home locations," the company said. Shortage of manpower did not affect Bharat Forge directly, but a lot of its suppliers were under pressure.

 

The issue has not been resolved yet, the official said. "I would say we're back to about 70 to 75% of normalcy. There is some amount of migrant labour or casual labour that has not come back," the official said.

 

Overall, Bharat Forge expects the September quarter to be better compared to the June quarter, based on its discussion with customers, price hikes, and volume uptick. The company expects its margin to recover to the previous range of around 28% only gradually. 

 

Bharat Forge said the orderbook of its defence business was INR 111.96 billion as of Jun. 30. Having been present on land and aerial systems already, the company said it has now made a breakthrough in the marine space with a new order for marine gas turbine generators from the Indian Navy.

 

"This is the largest order we have won to date on naval systems, and as our product range in turbines grows, especially on the complementary naval system side. We expect the Navy to become a very large customer for us, especially with the announcement of the 140 new ships that are going to be built," the company said. 
 

Bharat Forge reported its June quarter financials during market hours. The company's shares ended Monday's session at INR 2,093.10 on the National Stock Exchange, down 7.6%.  End

 

Edited by Avishek Dutta

 

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