Bharat Forge Ltd stock hit an all-time high of ₹1,935.50 on Friday. It’s up 24% so far in 2026, making it the best performer in the Nifty Auto index. Ashok Leyland Ltd is a distant second, up 4%. The auto index itself is down 8% over this period.
Both stocks are a play on the commercial vehicle (CV) upcycle in India, so what explains Bharat Forge’s solid beat? The stock’s recent rally began after the Indo-US trade deal announced on 2 February slashed US tariffs on Indian imports from 50% to 18%. It could drop further to a maximum of 15%, and that too for 150 days at most, following the US Supreme Court’s annulment of some of the Trump administration’s tariffs.
The tariff reduction brings huge relief to Bharat Forge, which took a ₹69 crore hit to its earnings because of tariff absorption in the nine months to December (9MFY26) when its profit before tax was ₹1,211 crore. Sales volumes also suffered owing to inventory destocking in the US's CV industry over tariff uncertainty. Consequently, Bharat Forge’s 9MFY26 export revenue declined 28% year-on-year to ₹1,809 crore in the American continent.
The outlook for the CV industry in North America has improved, signaling better days ahead for Bharat Forge’s exports. The industry’s barometer in North America is class 8 trucks, commonly known in India as heavy commercial trucks. Preliminary data from FTR Intelligence showed North America’s net orders of class 8 trucks jumped to 47,200 units in February, substantially higher than the month’s 10-year average of 24,991 units. This translates to 159% year-on-year growth and 47% month-on-month growth.
Beware, auto’s share is shrinking
The CV upcycle in India and North America are thus twin growth engines for Bharat Forge, apart from the lower US tariffs. However, this mainly applies to the company’s auto business, which Bharat Forge is shifting away from. Domestic auto sales and exports are likely to contribute 47% of FY26 standalone revenues, down from 53% in the pre-US-tariffs era in FY24.
There could also be headwinds in the non-auto business that offset the tailwinds in auto. Nomura Financial Advisory and Securities (India) noted that revenue growth at Bharat Forge’s key non-auto business clients such as Volvo, Daimler and Cummins remains under pressure. Even in the auto business, demand for forging components could drop if there is a substantial transition from internal-combustion-engine (ICE) trucks to electric trucks.
Risks in the non-auto business and technological risks in auto should push investors to assess whether the rally in Bharat Forge stock has already captured most of the positives. Nomura’s analysts estimate the company’s FY28 Ebitda at ₹4,541 crore, or 55% growth over FY26.
Bharat Forge’s shares fell almost 6% on Monday amid the broader market carnage to around ₹1,815. This is just 1.5% below Nomura’s target price of ₹1,844, which it arrived at by using an EV/Ebitda multiple of 20 for FY28.