Neutral Bharat Forge; target of Rs 1800: Motilal Oswal

Key Investment Pillars

Defense growth: BHFC's defense business is expected to drive growth, with a robust order book of ~INR110b to be executable over the next 4-5 years, including the domestic ATAG order worth ~INR45b.
Aerospace and JSA expansion: The company is expanding its aerospace business and has won new orders, including a carbine order worth INR14b and an INR2.5b order from the Indian Navy for unmanned marine systems.
Auto segment recovery: The GST rate cut has helped revive the domestic auto business, which augurs well for BHFC, with the company expecting the domestic CV/PV segments to post 10%/11% revenue CAGR over FY26-28E.
Export outlook improvement: The US Class8 industry is witnessing a cyclical downturn, but improved order intake over the last couple of months signals a recovery in the trend.

Defense order execution: Monitor the execution of defense orders, particularly the ATAGs order, to gauge the company's ability to deliver on its growth plans.
Aerospace and JSA growth: Track the growth of BHFC's aerospace and JSA businesses, including new order wins and revenue expansion.
Auto segment performance: Keep an eye on the performance of the domestic auto segment, including CV and PV sales, to assess the company's ability to capitalize on the recovery.
Export trends: Monitor export trends, particularly in the US Class8 industry, to gauge the company's ability to navigate global market fluctuations.