Let's focus on another stock, Bharat Forge. That stock is a little under the weather, a bit lower after it missed expectations. The stock has lost 35% from the recent peak. To discuss the outlook from here on, we're joined by Mr. Baba Kalyani, the chairman and managing director at Bharat Forge. Hi, Mr. Kalyani, good morning. Always good to see you. Well, let's focus first on this uncertainty with regard to tariffs. Is there anything you're hearing from your customer base because of these tariffs that could potentially be levied on Mexico, Canada, and some of them are important markets for you, right? So your take?
Yes, there. I mean, North America is an important market for us, Europe is an important market for us. Of course, India is also an important market. The tariff situation is still fluid. We don't know exactly what's going to happen. The two tariffs that we have heard which are going to be put in place in the next few weeks are the tariff on steel and aluminum, and that largely comes out of Canada, Mexico, Brazil, and some out of Europe. One action we are seeing because of tariffs on aluminum is we have an aluminum manufacturing facility for components in the US, and we seem to get suddenly a larger traction in terms of people wanting to buy, but unless that gets converted into a buy, we can't be sure what exactly is going to happen. So we have to wait and watch how the tariff situation unfolds. We haven't seen the reaction from Europe yet on tariffs, but it's a fluid situation. It's not something that is normal business.
Mr. Kalyani, good morning, sir. Prashant here, and always good to see you on the program. It's a fluid situation, but as someone who's been in the business for a long time and you've sort of associated with it and got large presence in the US, etc., could broadly the thrust of this new administration sort of in a way impede, and here I'm referring specifically on the defense side, some of the Make in India initiatives? It's a large, high-value area, very visible. India is the largest defense importer, and we're trying to change that. But you know, buy from the US and of course Make in the US, could it in a way stand in the way? Could that be a road bump towards our efforts and our companies here?
Sir, Mr. Kalyani, can you hear me? We lost the line. We'll try and have Mr. Kalyani back on in just a bit. But Bharat Forge, and of course the defense opportunity that Bharat Forge is looking at, is also very large. We'd like to get that clarification from Mr. Kalyani as well, so hopefully back soon. Yeah, but Mr. Kalyani's back, so let's go.
Absolutely, Mr. Kalyani. Prashant here. I don't know how much of my question you heard. Let me, my question was with regards to defense. We're the largest defense importer, we're trying to change that. It's a very large, high-value, visible item. Of course, the US most likely will try to tell us to buy more from the US. Is that in any way will that stand in the way of what we're trying to do here, which is Make in India and substitute some of these imports?
Absolutely not. Matter of fact, I think you know, you will get pushed to buy more things like jet aircraft, fighter planes, and things like that. So I don't think it will impact what you make here. I think the defense opportunity is going to continue to grow, and at least for us, we see the defense opportunity on a growth path.
Okay, since we're talking about defense, could you tell us what kind of numbers? We used to work with Mr. K, you know, I recall in the past you were doing roughly around 250-300 crores per quarter. That number went to around 500 crores, but in the past quarter again it was in that vicinity of around 350 crores. So what kind of revenue will keep?
Defense is a lumpy business. You know, once you execute an order for a high-value item for that quarter, this thing will go up. So please look at it from a year-to-date basis, and year-to-year we will continue to grow our business double-digit, that's for sure.
So for the next year, if you want to put a number for the defense business, should you be in the ballpark of around 2,200 to 2,500 crores for FY26? Somewhere around there?
Yes, sure, somewhere around that mark.
Also, Mr. Kalyani, so that's about the defense. What about the order book? A good order book, more than 5,000 crores?
More than 5,000 crores. So, 2,200 to 2,500 crores is our aim. Also, we want to take the order book to 10,000 crores. Okay, and execution would be what then? If you have to get to numbers, FY26 will be 2,200 to 2,500 crores. FY27, how much does it go to? I think every year it should increase by a double-digit number. Normally, defense orders grow that way. We are expecting the Ax order to be finalized by March end, that's what the MOD has said. That order will go on in terms of execution for three years, and that will be followed by other artillery orders and other products we are developing for the Indian defense services. So there's a lot in the pipeline. Plus exports, of course. So 2,200 crores with a double-digit growth at least is what we are looking at from there on.
