- 21 Mar 2025
- ICICIdirect Research
CABINET COMMITTEE ON SECURITY HAS APPROVED A ₹7,000 CRORE DEAL FOR THE ACQUISITION OF 307 ADVANCED TOWED ARTILLERY GUN SYSTEMS
BHARATFORG - 1181 Change: -13.00 (-1.09 %)News: According to media sources, the Cabinet Committee on Security (CCS) has approved a ₹7,000 crore deal for the acquisition of 307 Advanced Towed Artillery Gun Systems (ATAGS), significantly enhancing India's indigenous defense capabilities. Bharat Forge, as the lowest bidder, will manufacture 60% of these advanced artillery systems, while Tata Advanced Systems Limited will manufacture the remaining 40%. Developed by the Defence Research and Development Organisation (DRDO) in collaboration with Indian private firms, the ATAGS is a state-of-the-art 155mm artillery system with a firing range of up to 48 kilometers.
View: The group's defence business reported revenue of ₹337 crores in Q3FY25 and ₹1,488 crores in 9MFY25, reflecting a strong 49% Y-o-Y growth. With order wins of approximately ₹100 crores in Q3FY25, the executable order book in this segment now stands at ~₹5,700 crores. Defence has emerged as a key growth vertical for Bharat Forge, backed by its proven capabilities in the sector. This long-awaited order will further strengthen Bharat Forge’s defence vertical. Following the announcement, the stock surged ~5% in yesterday’s trading session. However, the company maintained a cautious growth outlook for its core automotive component business—both domestic and export—keeping near-term growth in check.
Impact: Neutral