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On Friday, JPMorgan analysts downgraded Bharat Forge (NSE:BFRG) Ltd. (BHFC:IN) stock rating from Overweight to Neutral and reduced its price target to INR1,145 from INR1,190. The revision comes as the firm anticipates muted revenue growth across several of the company’s key end markets. The analysts project over a 20% drop in US Class 8 truck production in 2025 and note continued sluggishness in Indian commercial vehicles (CVs).
The outlook for passenger vehicle exports, mainly to the United States, along with domestic sales, is expected to be subdued in the coming quarters. However, the analysts foresee growth in the defence, aerospace, and castings segments, which collectively account for 20% of Bharat Forge’s consolidated revenues. Despite this, the overall consolidated revenue growth is projected to remain limited at 2% in FY26, with a potential increase in FY27 by 17%.
JPMorgan’s revised expectations also include a decrease in estimated EBITDA for FY26 and FY27 by 11% and 3%, respectively. The analysts suggest that Bharat Forge’s stock may stay within a certain range for the next two to three quarters until there is more clarity on the financial year 2027.
The report also outlines potential catalysts that could positively impact Bharat Forge’s stock over a three to six-quarter period. These include a possible simultaneous recovery in US Class 8 trucks and Indian CVs in the second half of FY26 and FY27, potential restructuring of the European Union manufacturing business, and an increase in domestic defence revenues, expected to ramp up by the fourth quarter of FY26.
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