Bharat Forge Secures Indian Army Carbine Deal Backed by DRDO

23 Jun 2025 , 10:12 PM

Shares of Bharat Forge Ltd. rose nearly 2% on Monday, June 23, as sentiment around the company strengthened following a fresh update from the Defence Research and Development Organisation (DRDO). The public sector R&D body announced that a 5.56×45 mm CQB carbine, developed by its Armament Research and Development Establishment (ARDE) and manufactured by Bharat Forge, had been selected as the L1 bidder in the Indian Army’s procurement process.

The announcement came on a day when defence sector stocks outperformed broader indices a trend driven largely by rising geopolitical tensions in the Middle East. The recent escalation between Israel and Iran, now involving the United States, has sparked heightened investor focus on Indian defence manufacturers.

The U.S. reportedly carried out strikes on three Iranian nuclear sites over the weekend, formally entering a conflict that had, until now, largely remained a regional standoff. With security concerns mounting globally, investors appear to be betting on Indian defence exporters with robust order books and domestic contracts.

Bharat Forge’s performance, however, has been mixed on the financial front. In its most recent quarterly results announced on May 8, the company posted a 7% year-on-year decline in revenue, which came in at ₹2,163 crore.

Net profit slipped 11.2% to ₹345 crore. Meanwhile, EBITDA for the quarter stood at ₹616.5 crore, a 6.5% drop. Margins expanded modestly by 20 basis points, reaching 28.5%.

One area of notable weakness was the company’s defence segment, which saw its revenue shrink by half during the March quarter compared to the previous year. Yet despite the short-term dip, Bharat Forge managed to secure ₹4,343 crore in new orders, including a substantial ₹3,417 crore contract under the ATAGS (Advanced Towed Artillery Gun System) programme.

As of March-end, Bharat Forge’s defence order book stood strong at ₹9,420 crore, accounting for nearly 70% of all new business booked in FY25. While the company has held back on offering export guidance for the current fiscal, management has reiterated its focus on profitability and consolidation, especially as defence remains a long-term growth lever.

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