Mumbai, India - Bharat Forge Ltd, a leading auto component manufacturer, announced today that it is in the final stages of contract negotiations with the Indian Ministry of Defence (MoD) for the supply of the Advanced Towed Artillery Gun System (ATAGS). This development follows the MoD's March 2023 approval for the procurement of 155mm/52cal ATAGS and Gun Towing Vehicles (GTVs) for the Indian Army.
The ATAGS is an indigenously developed towed artillery gun system, a result of collaboration between the Defence Research and Development Organisation (DRDO) and private sector partners, including Bharat Forge. This procurement signifies a major step towards bolstering India's artillery capabilities and promoting self-reliance in defense manufacturing.
Bharat Forge emerged as the lowest bidder after a comprehensive technical evaluation and the opening of commercial bids. The company anticipates finalizing the contract before the end of the current financial year 2024-25 and has committed to notifying the stock exchange upon completion of the negotiation process.
This potential contract comes amidst Bharat Forge reporting its financial results for the quarter. While revenue remained relatively flat year-on-year at ₹2,246 crore, the company posted a net profit of ₹361.1 crore, representing a 4.4% growth. EBITDA for the quarter saw a 3% yearly increase to ₹625.4 crore, with the EBITDA margin expanding by 70 basis points to 27.8%.
Despite revenue, profit, and EBITDA falling slightly short of expectations, the company's EBITDA margin aligned with estimates. Bharat Forge maintains a positive outlook for the second half of the financial year, focusing on revenue growth and profitability improvement in its subsidiaries.
This news regarding the ATAGS contract negotiations has the potential to significantly impact Bharat Forge's business, particularly its defense sector involvement. The successful acquisition of this contract could further solidify the company's position in the domestic defense market and contribute to its future growth.
