Bharat Forge Receives License to Participate in Potential Defense Project

Today, in its latest exchange filing, Bharat Forge Ltd (BFL), a prominent auto ancillary company in India, disclosed that it has obtained a license to partake in a potential defence program under the Arms Rule 2016

The Ministry of Home Affairs has granted the company the necessary license to participate in the upcoming defence program. In the future, if the government announces any orders concerning small arms and ammunition, Bharat Forge will be eligible to participate. 

While investors typically view this company as an auto ancillary firm in India, it is also actively involved in the defence business. 

Following this announcement, the company's shares experienced a surge of approximately 5% in the last thirty minutes of today's trading session. The stock reached a high of Rs 914.60 during the intraday session. It began the day at Rs 876.95, unchanged from the previous day's closing price of Rs 876.30. 

BFL’s defence activities primarily revolve around Protective Vehicles, Defensive/Deterrence Systems, and Components. The company has achieved substantial progress in its Advanced Towed Artillery Gun System (ATAGS) program. 

Kalyani Strategic Systems Ltd (KSSL) is a 100% subsidiary of BFL, established to operate its defence business independently in the year 2021. This move aims to foster a dedicated and focused approach toward becoming a prominent player in the global defence industry. 

KSSL is concentrating on various sectors, including Artillery systems, Protected Vehicles, Armoured Vehicles Upgrades, Ammunition, Missiles, Air Defence solutions, Small Arms, Defence Electronics, and Aerospace. 

If we check the company’s defence orders, then in FY23, KSSL received new defence orders worth Rs 2,000 crore, encompassing artillery platforms and consumables. The execution of these orders is anticipated to commence in FY24.

Among these orders, KSSL obtained a prestigious export order valued at USD 155.5 million for an artillery gun system to be delivered to a non-conflict zone. This artillery system is an indigenous product with 100% intellectual property owned by the Company. 

The stock's 52-week highs and lows stand at Rs 919.50 and Rs 677.85, respectively. Currently, the company holds a market capitalization of Rs 41,783 Crore. Finally, the stock concluded the day at Rs 897.6 on the BSE. 

Regarding its performance, the stock has delivered a modest return of 14% in the last three months and an impressive 135% over the past three years

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.

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