Shares of Bharat Forge surged nearly 4% in early trade on Friday, May 9, 2025, hitting ₹1,157 on the NSE, up ₹43.60 from the previous close of ₹1,113.40. The rally comes amid rising border tensions between India and Pakistan, which have sent defence-related stocks soaring. However, despite the stock’s current momentum, global brokerage JPMorgan has adopted a more cautious stance on its long-term prospects.
While investors are chasing the defence-linked optimism, JPMorgan has downgraded Bharat Forge from ‘Overweight’ to ‘Neutral’, lowering its target price to ₹1,145 from ₹1,190. The brokerage cited continued headwinds in key export markets and the company’s lack of guidance on FY26 exports as key reasons for the downgrade. JPMorgan also trimmed its EBITDA estimates for FY26 and FY27 by 11% and 3%, respectively.
The downgrade comes even as Bharat Forge posted a 24.44% rise in consolidated net profit to ₹282.62 crore in Q4 FY25. However, revenue from operations fell 7.48% YoY to ₹3,852.60 crore. EBITDA for the quarter rose 2.71% YoY to ₹671.1 crore, and profit before exceptional items and tax rose nearly 24% to ₹429.4 crore.
On the segment front, revenue from forgings rose marginally by 0.82% to ₹3,436.23 crore. But the defence segment — typically a high-margin vertical — saw revenue slump 49.29% YoY to ₹284.35 crore. Despite this, the company’s defence order book remains strong at ₹9,420 crore. Of the ₹6,959 crore in new contracts won in FY25, 70% were defence-related.
Although investors are currently reacting to geopolitical developments and Bharat Forge’s positioning in the defence sector, concerns around global demand visibility, margin pressure, and lack of clarity on exports may limit upside from current levels.
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