Bharat Forge Reassesses EV Strategy After ₹450 Crore KPTL Impairment

Bharat Forge has recorded a ₹450-crore impairment on its investment in KPTL’s e-mobility business, reflecting a strategic reassessment of its electric vehicle plans amid changing global EV adoption trends. The move comes as several automakers and component manufacturers worldwide revisit electrification roadmaps due to uneven demand growth, policy uncertainty and increasing competition from Chinese electric vehicle manufacturers. Chairman and Managing Director Baba Kalyani stated that the impairment represents the company’s acceptance that the EV opportunity requires a fresh strategic evaluation as global market dynamics have shifted considerably from earlier expectations.

During the analyst interaction following the quarterly earnings announcement, Vice-Chairman and Joint Managing Director Amit Kalyani explained that the company decided to write off investments where immediate business scaling and revenue visibility were limited. He noted that EV adoption globally has evolved differently from initial industry projections, leading to widespread recalibration of electrification strategies outside China. Despite the impairment, the company clarified that it is not withdrawing from mobility electrification and continues to see long-term opportunities in selected vehicle segments and advanced mobility platforms.

K-Drive Mobility, the company’s electric mobility arm, is continuing to expand its product strategy beyond medium and heavy commercial vehicle applications. The business has secured new orders involving four EV platforms for light commercial vehicles, highlighting its efforts to diversify product offerings and customer segments. Management indicated that while near-term market conditions remain challenging, the company is repositioning its electrification portfolio to align with evolving demand patterns and commercial opportunities in the broader mobility ecosystem.

Alongside the EV-related impairment, Bharat Forge has initiated restructuring activities for the steel operations of CDP Bharat Forge in Europe. The restructuring process is expected to conclude by the end of calendar year 2027. Baba Kalyani said the company’s US and European operations continued to deliver modest operating profits despite weak market demand conditions. Management is also exploring alternative business opportunities within Europe to optimize the scaled-down manufacturing footprint and improve operational efficiency across overseas businesses.

Company executives stated during the conference call that the restructuring process would likely take 15 to 18 months and involve meeting existing customer commitments while carrying out liquidation-related activities. The company expects overseas subsidiary losses to gradually reduce as restructuring-related losses associated with CDP Bharat Forge are addressed. The management believes the restructuring initiative will support long-term financial stability while allowing the business to focus on more sustainable and profitable operations across international markets.

Bharat Forge Q4FY26 Standalone Financial Performance

The company reported a sequential recovery in Q4FY26 driven mainly by export revival and stable domestic demand conditions. Standalone revenue increased to ₹2,260.5 crore while EBITDA rose to ₹610.3 crore, resulting in a margin of 27%. Profit before exceptional items also improved sequentially to ₹486.2 crore. However, on a full-year basis, standalone revenue declined 5.1% to ₹8,395.8 crore and EBITDA fell 8.4% to ₹2,312.1 crore, largely due to weak export markets and slower North American truck demand during the financial year.

The domestic business remained comparatively resilient throughout FY26. Domestic revenue in Q4FY26 stood at ₹1,063.4 crore, remaining broadly stable sequentially while showing strong year-on-year growth from ₹803.4 crore in Q4FY25. The improvement was supported by higher commercial vehicle production, healthy passenger vehicle manufacturing and GST-driven replacement demand. For the full financial year, domestic revenue rose to ₹3,956.8 crore from ₹3,653.1 crore in FY25, aided by demand across commercial vehicles, utility vehicles, construction equipment, agriculture and industrial sectors.

Exports demonstrated a significant rebound during the fourth quarter. Export revenue increased 19.2% quarter-on-quarter to ₹1,084.4 crore, supported by inventory restocking and recovery in North American truck production following weakness in the previous quarter. Passenger vehicle exports to North and Central America remained strong, while aerospace business execution also improved. Despite the quarterly recovery, FY26 export revenue declined 15.2% to ₹4,011.4 crore from ₹4,728.1 crore in FY25 due to inventory destocking in North American truck markets and weaker oil and gas demand caused by subdued fracking capital expenditure.

Bharat Forge Consolidated FY26 Financial Snapshot

On a consolidated basis, Q4FY26 revenue stood at ₹4,528.3 crore with EBITDA of ₹773.5 crore and profit before exceptional items of ₹486.9 crore. For the full year, consolidated revenue increased 11.2% to ₹16,811.6 crore, while EBITDA rose 5.9% to ₹2,920.7 crore. Management stated that standalone exports were the primary contributor to sequential improvement during the quarter, while K-Drive Mobility also reported strong topline performance. This was partially offset by lower execution in the defence business during the period.

India-based manufacturing operations remain central to the company’s FY27 growth strategy. Despite the EV-related impairment and overseas restructuring initiatives, management expressed confidence in achieving approximately 25% revenue growth in FY27, provided there are no major geopolitical disruptions affecting global demand. The company expects order execution across business divisions, recovery in export markets and domestic industrial demand to support both revenue and profitability growth in the coming financial year.

The company also plans to continue capital expenditure investments across forging, casting and product platform businesses. Planned investments are estimated at ₹800-850 crore over the next 15 to 18 months. In addition, management confirmed that it is evaluating further merger and acquisition opportunities within India, particularly in high-growth sectors that complement the company’s existing manufacturing and engineering capabilities.

Frequently Asked Questions

Why did Bharat Forge take a ₹450-crore impairment on KPTL’s e-mobility business?
Bharat Forge recorded the impairment because global electric vehicle adoption has progressed differently from earlier expectations, leading the company to reassess its EV investment strategy. The company stated that slower demand growth in several markets, changing policy environments and rising competition from Chinese EV manufacturers contributed to the decision. Management clarified that the impairment reflects a strategic recalibration rather than a complete exit from mobility electrification, as K-Drive Mobility continues to pursue new EV platform opportunities in selected commercial vehicle and light mobility segments.

What is Bharat Forge’s outlook for FY27?
Bharat Forge remains optimistic about FY27 and expects around 25% revenue growth for its Indian manufacturing operations if geopolitical conditions remain stable. The company believes stronger export recovery, improved order execution and stable domestic industrial demand will support growth. It also plans capital expenditure investments of ₹800-850 crore across forging, casting and product platforms over the next 15 to 18 months. Additionally, the company is evaluating merger and acquisition opportunities in India to strengthen its long-term manufacturing and engineering business portfolio.