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Shares rose after a subsidiary of Bharat Forge and AM General signed a letter of intent (LOI) for the supply of made-in-India advanced artillery cannons to US
Bharat Forge Shares Rise
Bharat Forge Defence Deal: Bharat Forge’s share price climbed by 2.65% on Thursday, February 20, 2025, reaching an intraday high of Rs 1,103.95 per share, following a significant development in the defence sector.
The uptick was triggered by the announcement that Kalyani Strategic Systems (KSSL), a subsidiary of Bharat Forge, and AM General (USA) had signed a Letter of Intent (LOI) to supply advanced artillery cannons made in India to the United States.
In a statement, Bharat Forge said, “Kalyani Strategic Systems Ltd (KSSL), a 100% subsidiary of Bharat Forge Ltd, India, and AM General, USA, have signed a Letter of Intent (LOI) at IDEX 2025 for the supply of made-in-India advanced artillery cannons to the United States. This marks the first-ever supply of cannons from an Indian defence manufacturer to the US, a testament to the strengthening bilateral defence cooperation between our two nations.”
Baba Kalyani, Chairman & Managing Director of Bharat Forge, added, “The supply of made-in-India critical defence systems to the United States is a groundbreaking achievement! We at KSSL are proud to be the first Indian company to supply cannons to the US. This agreement underscores our capabilities and reinforces our mission to be a leading provider of artillery solutions worldwide. It also highlights the trust and confidence global defence leaders like AM General have in our capabilities.”
The partnership includes co-developing next-generation artillery solutions, such as mounted, towed, and ultra-light gun systems in 105mm and 155mm calibers.
John Chadbourne, Executive Vice President of AM General, stated, “This Letter of Intent represents an important step in expanding our strategic partnership. With KSSL’s proven artillery capabilities and our shared commitment to innovation, we see immense potential in bringing advanced artillery solutions to the US defence forces. We look forward to exploring this collaboration with the Kalyani Group to deliver advanced mobile artillery capabilities.”
Bharat Forge is a global leader in manufacturing advanced components and solutions for industries such as automotive, aerospace, railways, marine, and energy. The company has a strong international presence and partners with major OEMs across the US, Europe, Japan, China, and India. Bharat Forge is expanding into defence, aerospace, and e-mobility, positioning itself as a key player in these high-growth sectors.
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Brokerage firm Motilal Oswal, in a report published last week, gave a neutral rating for Bharat Forge with a share price target of Rs 1,155 (based on 28x Dec’26E consolidated EPS).
The brokerage firm stated Bharat Forge Q3 FY25 performance lagged their estimates, driven by slower growth across key segments as also a slower ramp-up of defense.
“Outlook for CV demand (both domestic and exports), PV exports and domestic non-auto remains weak. Even overseas subs are taking lot longer to turnaround. Its key growth drivers are likely to be defense and JSA,” it said.
“We sharply cut our FY25E/FY26E EPS by 25/17% to factor in the weak outlook in major segments, including CVs, slower-than-expected defense ramp up and also continued weakness in overseas subsidiary performance. The stock appears fairly valued at the current valuations of 33.9x/25.0x FY26E/FY27E consolidated EPS,” it added.
The brokerage further said, “The Indian CV market is expected to post slightly better growth in 4Q QoQ while FY26 is likely to be flat. The US Class-8 CV demand is projected to grow 10% in FY26, largely back-ended. Uncertainty remains regarding potential tariff changes.”
“Weak demand in the EU and the US persists due to the industry transition to EVs and economic uncertainty. EU operations posted INR100m EBITDA, while US operations reduced losses to INR60m (with 60% utilization). Margin improvements in the US have been driven by cost reductions and efficiency. The company is conducting a comprehensive review of its European manufacturing footprint, with a clearer direction expected in six months,” the brokerage said.
As of 10:10 AM, Bharat Forge’s share price was trading at Rs 1,074.50, down 0.08%, while the BSE Sensex was down 0.34% at 75,677.45. Bharat Forge’s market capitalization stands at Rs 51,370.62 crore, according to BSE, and the company is part of the BSE 100 index.
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