Check How US Tariffs Impact Bharat Forge?

The tariff conflict that has intensified over the past few days has drawn attention to all sectors and the potential consequences such actions could have on them. According to a report from FTR Transport Intelligence, Class 8 trucks in North America may face a considerable increase in costs if the tariffs remain in place.

The transport agency highlighted that up to 40% of Class 8 trucks in the US are manufactured in Mexico, while 65% of Canada’s Class 8 trucks are produced in the US. In response, Canada plans to impose counter-tariffs on trucks, steel, cars, and other products over the next three weeks.

“Tariffs and counter-tariffs will disrupt supply chains and raise vehicle prices,” the FTR report stated.

This development also draws attention to Bharat Forge, which has exposure to the US Class 8 truck market.

Despite a decline in US Class 8 truck orders for the 5th consecutive month, Bharat Forge’s shares rose by over 2% on Wednesday, March 5, 2025. North American Class 8 truck orders dropped 34%, from 25,700 units in the previous year to 17,000 units, and fell 29% from the prior month’s 24,000 units.

Bharat Forge Business Segments

Automotive Business: The Indian commercial vehicle (CV) sector has experienced strong growth over the past 3-4 years, both in terms of total numbers and tonnage. However, for the first nine months of FY25, a large base effect combined with a slowdown in capital expenditure growth has resulted in subdued demand for the sector and its CV business. The long-term outlook remains positive, and the company continue to explore both organic and inorganic opportunities to strengthen its position in the CV space.

The domestic passenger vehicle (PV) market has rebounded significantly on a year-over-year basis, driven by increased penetration. The company is focused on establishing new partnerships to capture long-term growth opportunities in personal mobility, especially with customers shifting towards more premium and safer vehicles.

Industrials Business: The Industrial segment reported revenues of Rs 5,126 million. The decline, both sequentially and annually, is primarily due to reduced defence sales during the quarter. Despite the cooling momentum in capital expenditure, which may impact its industrial business in the short term, the company believe sectors such as nuclear and space present substantial opportunities for medium to long-term growth in its industrial revenues.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.