Bharat Forge share price: Analysts have mixed outlook even after a strong show in Q2

UBS, meanwhile, has a 'Buy' rating on Bharat Forge with a target price of ₹1,260 per share. The brokerage said that Bharat Forge reported a slightly improved September quarter performance with a continued defense ramp-up. New businesses are expected to fuel strong growth, it said.

"A robust performance in passenger vehicle exports is anticipated, with a target of achieving 25% EBITDA margins in the defense segment," UBS said.

Jefferies likes the company's structural story but is concerned on cyclical headwinds in exports and rich valuations. The brokerage noted that the timing of the long-awaited domestic gun order remains uncertain.

Citi has advised a caution on subsidiary margins due to uncertainty about a major Indian defense order, potential export challenges from geopolitical issues and macro trends, and high valuations leaving minimal margin for error.

CLSA praised the strong execution but expressed concerns over expensive valuations. The brokerage said that subsidiaries continue to post losses, which are affecting the overall growth in profit.

"In the second-quarter, the standalone performance slightly exceeded estimates, driven by impressive revenue growth in defense and exports. The defense and export segments are expanding rapidly due to new order wins, while domestic commercial vehicle (CV) and passenger vehicle (PV) businesses seem to be decelerating," it said.

Morgan Stanley says the company's business outlook remains unchanged; they aim to boost market share in core areas, scale up defense and EV segments, and enhance profitability in overseas subsidiaries.

According to Morgan Stanley, the FY25 export commercial vehicles outlook is flattish, with optimism about India CVs, but concerns remain in renewables, particularly wind energy. In defense and industrials, management aims for nearly 25% EBITDA margins by FY25.

While Bharat Forge's core India business is on the growth path, the underlying macro environment in the US and EU is showing signs of weakening, said domestic brokerage house Motilal Oswal Securities. It said that the newly-established businesses incubated over the last 5-10 years have reached pivotal moments and that they have the potential to offset the anticipated challenges in core operations.

"The defence segment is poised for significant growth, with execution already underway. The e-mobility sector presents a substantial opportunity and possesses foundational elements, but the competitive landscape is yet to evolve," Motilal said while suggesting a target price of Rs 1,250 on the Bharat Forge stock.

With its diverse presence, Bharat Forge is better placed than its previous cycles to benefit from steady orders and ramp up in domestic and exports PVs and CVs and healthy outlook for industrials with strong wins in segments like Aerospace, defense, mining, agriculture, said Yes Securities.

The brokerage has a revised target price of ₹1,295 a share from ₹1,267 earlier.