Bharat Forge Ltd. management is expressing strong confidence about the company's prospects for 2026 following the successful securing of its largest small arms contract to date. The optimism comes as the company anticipates significant growth from domestic defence wins and infrastructure development across India.

Record Defence Contract Win

The company has secured a substantial contract worth ₹1,661.9 crore from the Ministry of Defence to supply 255,128 Close Quarter Battle (CQB) Carbines over a five-year period. This represents the largest small arms contract in the company's history and demonstrates the growing confidence in indigenous defence manufacturing capabilities.

Joint Managing Director Amit Kalyani emphasized the indigenous nature of these products, stating that the CQB carbines and ATAGS artillery guns developed with DRDO are "deeply and fundamentally Indian products, Indian designed, developed and manufactured with complete Indian IP." He believes this factor should provide significant confidence to the armed forces.

Strong Defence Order Book Position

The recent contract win has strengthened Bharat Forge's defence portfolio significantly. The company's defence order book now stands at approximately ₹11,000 crore, positioning it well for sustained growth in the coming years. Kalyani expects naval systems and unmanned platforms to emerge as the next growth frontiers for the company.

"India is dramatically increasing its shipbuilding capacity," Kalyani noted, highlighting this as an area where the company sees significant opportunities for expansion.

Strategic Business Restructuring

Regarding the transfer of the defence business to a wholly-owned subsidiary, Kalyani clarified that the move was designed to improve operational focus rather than immediate capital raising. He explained that the defence business requires different operational approaches, stating, "This business has a different cadence, it has different DNA. We need to give it that kind of scaffolding and support."

Diversified Growth Strategy

Despite headwinds in the North American truck market affecting the company's standalone revenue in the second quarter, Kalyani downplayed the segment's impact on the broader group. He noted that the US truck market represents approximately a double-digit percentage of total revenue, reducing its overall influence on company performance.

Instead, the company is focusing on India's domestic manufacturing push spanning multiple infrastructure sectors:

• Airport development projects
• Port infrastructure expansion
• Railway modernization initiatives

Kalyani compared India's infrastructure growth potential to China's development trajectory, indicating substantial opportunities ahead. The management expects this domestic infrastructure boom, combined with the maturing defence portfolio, to drive qualitatively better performance in 2026 compared to 2025.

Bharat Forge has provided strong guidance for its defense vertical, signaling confidence in this strategic business segment. The company's management has highlighted the positive outlook for defense operations, indicating robust growth prospects ahead.

Defense Vertical Outlook

The company has issued strong guidance for its defense vertical, demonstrating management's confidence in this sector's performance. This positive outlook reflects the company's strategic focus on defense manufacturing capabilities.

Export Opportunities

Bharat Forge has identified significant opportunities in the export vertical specifically for its defense segment. This development suggests the company is well-positioned to capitalize on international defense market demand and expand its global footprint in the defense manufacturing space.

The identification of export opportunities in the defense segment indicates the company's readiness to serve international markets and leverage its manufacturing capabilities for global defense requirements.