Bharat Forge Reports 8% Drop in September Quarter Net Profit Amid Higher Costs

Component maker Bharat Forge has posted an 8 percent decline in its September quarter net profit at ₹276 crore, impacted by higher costs, even as revenue grew 21 percent to ₹4,870 crore. The company also announced a ₹290 crore investment in its subsidiary Kalyani Strategic Systems and outlined a broader ₹2,000 crore capital expenditure program.

Automotive, industrial, and defence component maker Bharat Forge has reported an 8 percent decline in its net profit for the September quarter, coming in at ₹276 crore compared to ₹299 crore during the same period in the previous year. The drop in net profit was attributed to higher costs.

Despite the dip in net profit, the company registered a 21 percent increase in revenue, reaching ₹4,870 crore compared to ₹4,032 crore in the corresponding quarter last year. Earnings before interest, tax, depreciation, and amortization (Ebitda) rose 9 percent to ₹778 crore, up from ₹715 crore.

In a strategic move to bolster its defence operations, Bharat Forge announced an investment of ₹290 crore in its wholly-owned subsidiary, Kalyani Strategic Systems (KSSL), to be disbursed in one or more tranches. KSSL will channel these funds into business expansion, capital expenditure, and product and technology development. KSSL's turnover was reported at ₹1,224 crore in FY26, compared to ₹1,404 crore in FY25. KSSL is a public limited company engaged in developing, manufacturing, supplying, and providing life support for defence platforms, systems, and equipment for domestic and global markets.

The company experienced positive momentum across several segments during the quarter. Passenger car exports saw strong year-on-year growth driven by broad-based demand across North America and Europe. In the commercial vehicle segment, performance was supported by inventory restocking, a rebound in North American truck volumes, and modest market share gains in Europe.

Meanwhile, the industrial segment saw steady annual growth, driven primarily by robust performance in the oil and gas sector and stable growth in new business verticals, though the construction and mining sector experienced a weak quarter.

During the first half of the fiscal year, Bharat Forge secured new orders worth ₹2,107 crore, which included ₹681 crore in the defence sector. This brought the company's overall defence order book to ₹10,960 crore as of the end of September.

BN Kalyani, Chairman and Managing Director of Bharat Forge, stated that the company has received Bulk Production Clearance for the Advanced Towed Artillery Gun Systems (ATAGS) order, with revenue recognition scheduled to begin from the first quarter of fiscal year 2028.

Additionally, the company is undertaking a ₹2,000 crore capital expenditure program spanning automotive, aerospace, defence—including a new energetics plant—and data centre and semiconductor components. According to the company, these facilities will come online in phases over the next 12 to 18 months, driving growth from FY29 and gradually shifting the product mix over the medium term.

"Bharat Forge's latest financial results highlight the classic manufacturing challenge where top-line revenue expansion does not always translate directly into immediate profit growth due to rising operational costs. However, their strategic focus on the defence sector, backed by a substantial order book and planned capital expenditure in high-growth areas like semiconductors and aerospace, indicates a clear long-term vision. For industrial and manufacturing enterprises, balancing near-term cost pressures while investing in future-ready capabilities is crucial for sustainable growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes