Highlights
- Bharat Forge signed a Rs 425 crore contract with the Ministry of Defence.
- The order involves supplying Gas Turbine Generators for Indian Navy warships.
- The contract marks Bharat Forge's entry into the marine gas turbine business.
Bharat Forge Limited (NSE:BHARATFORG) has signed a contract valued at Rs 425 crore with the Ministry of Defence (MoD), India, for the supply of Gas Turbine Generators (GTGs) to the Indian Navy. The company disclosed the development through a press release submitted to stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
According to the company, the contract will be executed over a period of five years and involves supplying onboard power generation systems for Kolkata-class naval ships.
Source: Analysis by Kalkine
Details Of The Gas Turbine Generator Project
The Gas Turbine Generators covered under the contract are rated at 1.25 MW and are intended to replace lower-capacity units currently operating onboard the vessels. The order has been awarded under the Buy (Indian) category of the Defence Acquisition Procedure 2020 (DAP-2020).
Bharat Forge stated that the project will result in the first indigenous gas turbine-based power plant operating aboard Indian Naval ships. The contract also represents the company's entry into the marine gas turbine segment.
Expansion Into Marine Gas Turbine Business
The company plans to establish a dedicated integration and testing facility for Gas Turbine Generators as part of the project. According to Bharat Forge, it will also participate in future design and development programmes for larger power plants and propulsion gas turbines.
The manufacturing and testing capabilities developed under this initiative are expected to support domestic requirements related to gas turbines and gas turbine generators used by India's armed forces.
Defence Sector Presence
Bharat Forge stated that it has an established presence in India's defence sector and has been involved in programmes supporting the armed forces. The company noted that local production capabilities could contribute to maintenance, overhaul and lifecycle support requirements for gas turbines and associated systems.
The contract adds to Bharat Forge's defence business portfolio, which spans artillery systems, armoured platforms, aerospace components and other defence-related technologies.
About Bharat Forge
Bharat Forge Limited is a Pune-based multinational engineering company engaged in the manufacturing of safety-critical components and solutions.
The company serves sectors including automotive, power, oil and gas, construction and mining, railways, marine, defence and aerospace. Bharat Forge operates a manufacturing footprint across multiple countries and provides engineering, manufacturing, testing and validation services.
Key Risks To Watch
- Project execution delays could affect delivery timelines.
- Defence procurement schedules may influence revenue recognition.
- Cost escalation risks may impact project profitability.
- Dependence on future defence orders may affect growth visibility.
Significance Of The Contract
The order is notable because it expands Bharat Forge's activities into marine gas turbine systems, a segment associated with naval power generation.
The project also aligns with domestic manufacturing initiatives under the Buy (Indian) procurement framework and introduces indigenous gas turbine-based power generation technology for naval applications.
Summary
Bharat Forge (NSE:BHARATFORG) has secured a Rs 425 crore contract from the Ministry of Defence to supply 1.25 MW Gas Turbine Generators for Kolkata-class Indian Navy ships. The five-year project marks the company's entry into the marine gas turbine business and includes plans to establish a dedicated integration and testing facility. The contract has been awarded under the Buy (Indian) category of the Defence Acquisition Procedure 2020.
FAQs
Q: What is the value of Bharat Forge's latest defence contract?
A: Bharat Forge has secured a contract worth Rs 425 crore from the Ministry of Defence.
Q: What will Bharat Forge supply under the contract?
A: The company will supply 1.25 MW Gas Turbine Generators for Kolkata-class Indian Navy ships.
Q: Why is this contract important for Bharat Forge?
A: It marks the company's entry into the marine gas turbine business and naval power generation segment.