Bharat Forge swings to a net loss for the June quarter, driven by higher energy and input costs, despite a significant rise in revenue and strong defence order intake, as it plans a major capacity expansion and capital raise.
Bharat Forge swung to a consolidated net loss in the quarter to June 30, 2026, even as revenue climbed sharply, underscoring how higher energy and input costs are still pressuring margins at one of India’s best-known engineering groups. Moneycontrol reported that the company posted a loss of Rs 90 crore, compared with a profit of Rs 284 crore a year earlier, while revenue rose 18.7% year-on-year to Rs 4,640 crore. EBITDA increased 10.2% to Rs 752 crore, with the margin at 16.2%.
The company said its standalone business delivered 11.5% topline growth, with margins of 26.2%, though management said that figure would have been closer to 28% after adjusting for higher input costs. According to the company, spiralling energy prices, geopolitical uncertainty and manpower shortages weighed on profitability during the period. Even so, it kept a constructive tone on the outlook for its Indian manufacturing business.
Defence remains the clearest growth engine. Bharat Forge won Rs 1,352 crore of orders in the quarter from its Indian operations, including Rs 681 crore from defence, and its defence order book stood at Rs 11,196 crore as of June 30, 2026, according to the company. A standout contract was its largest naval order so far, for 12 Marine Gas Turbine Generator sets from the Ministry of Defence. The company also said it expects defence, aerospace, data centres and semiconductor-linked work to contribute more meaningfully to revenue over time.
To support that shift, Bharat Forge plans to spend about Rs 1,800 crore over the next 12 to 18 months on dedicated forging and machining capacity, including an energetics plant in Andhra Pradesh. Its board has also approved a proposal to raise Rs 2,500 crore through equity shares, convertible securities or other permitted instruments, subject to shareholder approval. Brokerages remain split: Jefferies sees room for gains and kept a Buy rating with a Rs 2,500 target, while Citi retained a Sell call and set a Rs 1,210 target, reflecting the wider debate over whether the stock’s long-term defence opportunity outweighs near-term margin pressure and a rich valuation.
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