Bharat Forge shares can decline 12%, says UBS even as it raises price target — Here's why

Shares of Bharat Forge Ltd., which gained over 12% in the past month, can reverse all of those gains, as per the projections made by brokerage firm UBS in a note on Monday, November 17.

UBS reiterated its "sell" call on the stock and has raised its price target to ₹1,230 per share, projecting a potential downside of 11.9%. This comes on the back of the management commentary after Bharat Forge's second quarter results.

Bharat Forge's management expects the third quarter to remain soft, with recovery likely from the fourth quarter, UBS said.

The brokerage added that Bharat Forge's second quarter results witnessed weakness in the auto segment, while the defence segment was strong. Its margins were healthy, aided by strong cost control.

The company is expecting the aerospace business to grow at a strong 40% in financial year 2026, with similar rates anticipated over the next three to four years.

The defence business is currently contributes between 10% - 12% to Bharat Forge's overall revenue, and the management has plans to take that contribution to the mid-20s by financial year 2030.

During its earnings presentation last week, Bharat Forge warned that it is witnessing exports to the North American market decline further in the second half of FY26, given the challenging demand conditions.

The company's near-term outlook remained tepid. Its management is prioritising growth in the India business, with plans to expand through inorganic opportunities, UBS said.

“Our overall strategy is to pivot our business to the India-centric business, because we believe that India is going to be the largest growing market for the next 15–20 years,” the company's chairman and managing director, Baba Kalyani,

said last week.

The company's defence order book stands at ₹1,100 crore. This excludes a ₹140 crore domestic carbine order. UBS said that restructuring of the EU steel business is currently being evaluated and updates are likely by the end of this fiscal.

Bharat Forge shares were trading 0.1% up at ₹1,398.5 apiece around 10.25 am on Monday. The stock has gained 12.7% in the past month.

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