Bharat Forge Limited

Industrials — Metal Fabrication · NSE

₹1,835.00−₹17.40 (−0.94%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Bharat Forge Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Bharat Forge Limited engages in the manufacture and sale of forged and machined components in India and internationally. It operates through three segments: Forgings, Defence, and Others.

IndustryMetal Fabrication

SectorIndustrials

Employees3,954

Annual revenue₹16,224 Cr

How does it make money?

Turns over ₹16,224 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 3,954 employees supports ₹4.10 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.10 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE18.7%

What is the outlook?

23 analysts covering the stock expect revenue to grow about 121.4% and earnings to grow about 37.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+121.4%

Est. earnings growth+37.8%

Analysts23

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +32% while net margin moved +55% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+32%

Margin effect+55%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 124.2x is demanding — it needs sustained high growth to justify
✗ P/E is 49% above its own historical median of 83.5x — expensive by its own standards
✗ P/B of 9.16x is a steep premium to book

Quality vs. Valuation

Company Quality

70/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

23/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

124.2x

3Y Median

83.5x

40 monthly readings · mean 85.6x · range 49.8x–152.7x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 49% above its 3y median of 83.5x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 922% above the peer median of 12.2x.

vs. its own history

Expensive

83.5x median over 40 months · +49%

vs. sector peers

Expensive

12.2x median of 4 peers · +922%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

31.6x

PEG

4.62

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 14.7% to 18.8% over 3 years.
Return on equity is rising
ROE has improved from 7.9% to 11.3%.
Return on capital is rising
ROCE has improved from 10.8% to 15.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 high

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 14.7% to 18.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 49% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 18.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Revenue growth stays above 7% a year✓ 9.7% CAGR
Latest reported year was 18.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹346 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 13%✓ 15.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹89,671 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

124.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.16x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹14.77

Profitable

Profitable on a per-share basis

ROE

11.3%

Moderate

Moderate capital efficiency

ROCE

15.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.76x

Moderate

Moderate leverage

Revenue Growth (YoY)

18.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

14.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.46%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹346 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

38.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.6%

Average

Average margins

Net Margin

4.0%

Average

Average bottom-line conversion

Current Ratio

1.17

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.52

Defensive

Steadier than the market

52W Range Position

57%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1899.8 / 1981.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹12,289 Cr	₹15,043 Cr	₹14,530 Cr	₹16,224 Cr	+9.7%
EBITDA	₹1,802 Cr	₹2,696 Cr	₹2,821 Cr	₹3,045 Cr	+19.1%
EBITDA Margin	14.7%	17.9%	19.4%	18.8%	—
PAT (Net Profit)	₹528 Cr	₹951 Cr	₹941 Cr	₹1,080 Cr	+26.9%
EPS	₹11.35	₹20.43	₹20.05	₹22.58	+25.8%
ROE	7.9%	13.3%	10.2%	11.3%	—
ROCE	10.8%	18.9%	16.3%	15.6%	—
Total Debt	₹7,313 Cr	₹7,948 Cr	₹6,698 Cr	₹7,309 Cr	-0.0%
Free Cash Flow	₹298 Cr	₹140 Cr	₹346 Cr	₹346 Cr	+5.1%

🟢 Revenue has grown at 9.7% a year over 3 years.

🟢 EBITDA has grown at 19.1% a year over 3 years.

🟢 EBITDA Margin has risen from 14.7% to 18.8% over 3 years (+4.1 pts).

🟢 PAT (Net Profit) has grown at 26.9% a year over 3 years.

🟢 EPS has grown at 25.8% a year over 3 years.

🟢 ROE has risen from 7.9% to 11.3% over 3 years (+3.4 pts).

🟢 ROCE has risen from 10.8% to 15.6% over 3 years (+4.8 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.0% a year).

🟢 Free Cash Flow has grown at 5.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹22,260 Cr

Total Liabilities

₹12,703 Cr

Cash & Equivalents

₹848 Cr

Operating Cash Flow

₹1,487 Cr

Capex

-₹1,140 Cr

Shareholding (proxy)

Institutional Holding

37.3%

Insider Holding

47.0%

Corporate Actions

Next Earnings

13 Nov 2026

Dividend Rate

₹8.5

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

9 Buy · 6 Hold · 9 Sell

Target Price (Mean)

₹1,978.88

+7.8% vs CMP

Target Range

₹1,200 – ₹2,500

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

2 mixed4 general

What Bharat Forge Holders Got Right

Simply Wall Street, 17 Oct

What Bharat Forge Doubters Overlooked

Yahoo Finance, 15 Oct

Bharat Forge Q1 Loss at ₹90 Cr After German Unit Hit

HDFC Sky, 10 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Krishanveer Forge Share Price Rise: Valuation and Peers

Univest, 13 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Bharat Forge invests ₹2,400 crore in Kalyani Strategic Systems

scanx.trade, 16 Oct

Bonus + Stock Splits + Dividends + Buybacks From June 29-July 3: Bajaj, M&M, Biocon, TechM; 46 Stocks In Focus

Goodreturns, 17 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Risk

MiddlingProfitability

WeakValuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Debt / EBITDA stays below 2x · see Key things to watch ↑