“BFL will become a global player in defence sector in the next 5-6 years. However, the company’s primary focus will continue to be automotive and automotive related businesses. We are good at machinery metals, metallurgy and equally good in making steel, required for this. We have developed the capability, technology and created engineers, who finally design and build almost any artillery system ourselves,” maintains Baba Kalyani, Chairman & M.D. of Bharat Forge.

The company is a flagship company of over five decades old Kalyani group – a US$ 3 billion conglomerate with a 10- manufacturing locations spread across India, Germany, Sweden, France and North America and a global work force of 10,000 people.

Having proved its mettle as an Indian multinational and the undisputed leader in forging, the company is all set to emerge as a leading indigenous player in defence and aerospace sectors. Its wide defence product portfolio include design, development, engineering and manufacturing of systems and sub-systems for artillery guns, armoured fighting vehicles, protected vehicles, ammunition, air defence solutions, defence electronics and small arms.

For the last many years, BFL has been making substantial investments in research & development and creating a state-of-art manufacturing facilities for its defence products. Now the company is gearing up to capitalize a huge upcoming demand. There are an enormous opportunities exist to exhibit its technological excellence to manufacture variety of most advanced and critical products for the Indian defence sector under the government’s most ambitious ‘Atmarnirbhar Bharat’. In order to encourage the indigenous production, a negative list of 101 items have already been announced. This augurs well for a company like BFL who is fully qualified on different parameters.

Recently, the company has received an order worth Rs. 177.95 crore for supply of its Kalyani M4 Vehicles, a new generation armoured vehicles. In this regard, it has also announced its tie-up for production of protected vehicles in India with Paramount group, a global aerospace and technology company. Likewise, the company looks enthused and positive in getting big ticket defence orders. BFL has been a global provider of high performance critical components and solutions to various industrial sectors including automotive, railways, power, construction & mining, e-mobility, marine and oil & gas. Its strong and proven capabilities in these areas are now getting extended and transformed into the opportunities being thrown open to the private sector in defence space, which is all set to become a strong and important business vertical to further accelerate its pace of growth. The big volume in defence is highly desirable because that would only be a game changer for the company. A delay in order finalization and longer execution and receivables cycle are the two areas of concern as these necessitate more working capital. Nevertheless, the fact remains that going forward, this particular new avenue will give a lot of recognition to BFL including strong foothold in export market.

According to Mr. Kalyani, an impressive bounce back of manufacturing sector in general and automotive sector in particular, will improvise the performance of BFL in the FY 2021-22. The stock is being quoted at Rs. 622, quite near to its yearly high of 677. However, considering its yearly low of Rs. 207, it certainly looks expensive. Keeping an investment horizon of two years, one could accumulate the stock in small lots at every decline for reasonably good returns.