Bharat Forge Share Price: Is the Defense Stock a Sell?

Bharat Forge Share Price Under Pressure

The Bharat Forge share price has been in focus after Motilal Oswal Financial Services (MOSL) gave it a Neutral rating with a target price of ₹1,290, indicating a 7% downside from its previous close. Despite the company's transformation into a diversified defense and aerospace heavyweight, the brokerage firm warns of multiple headwinds in the near term.

Key Challenges Facing Bharat Forge

The company faces several challenges, including:

• Valuations Too Rich: Bharat Forge is trading at 54x FY26E EPS and 38x FY27E EPS, which MOSL believes assumes an almost flawless execution across defense, aerospace, and forgings.
• Export Demand Weak: The US Class-8 truck market, a significant export driver for Bharat Forge, remains subdued, with fleet operators delaying order placements and freight economics remaining soft.
• Europe Still Weak: The company's European subsidiaries continue to drag on overall margins due to structurally higher labor and energy costs, ageing manufacturing setups, and weaker OEM demand.
• Aluminium Challenges: The aluminium-forging business is facing challenges, including a legacy low-margin order and a five-year non-compete clause in North America, restricting entry into a key EV forgings market.
• Defence Scaling Slow: While Bharat Forge has an impressive ₹1.14 lakh crore defense order book, revenue conversion will take time, and key programs are expected to enter production only in FY27.

Technical View

On the technical front, Aakash Shah, Technical Research Analyst at Choice Equity Broking, has issued a Buy call on Bharat Forge with an entry at ₹1,388, a stop-loss at ₹1,340, and a target of ₹1,500. The stock's broader structure remains firmly bullish, supported by a pattern of higher highs and higher lows.

Conclusion

Bharat Forge's long-term defense story remains compelling, but MOSL argues that the market has already priced in much of the optimism. With multiple headwinds in the near term, the brokerage firm remains cautious, advising investors to wait for a more favorable entry point.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.