Bharat Forge to begin Army deliveries of India’s first private-sector towed artillery gun

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Bharat Forge is set to become the first private-sector company in India to supply a towed artillery gun to the Army, with deliveries of the Advanced Towed Artillery Gun System (ATAGS) scheduled to begin in the first quarter of financial year 2027-28. The company will supply 184 guns over the next four years after receiving the long-awaited bulk production clearance.

The ATAGS order marks Bharat Forge’s move into serial production of the artillery system and is expected to provide a boost to its defence business, with several other defence programmes also expected to start contributing to revenue from the second half of the current financial year.

“The production approval has now come through and that should start shipment from Q1 of ‘27, ‘28,” Amit Kalyani, vice chairman and joint managing director, Bharat Forge, said during the company's Q2 FY27 earnings call on November 5.

The ATAGS order was originally won by Bharat Forge and currently sits with the parent company. Kalyani said the order will subsequently be novated to Kalyani Strategic Systems Ltd (KSSL), the group's defence subsidiary, but deliveries will initially be made through Bharat Forge.

The company will supply 184 guns under the programme over four years. Production is expected to ramp up gradually, with around 10% of the order expected to be delivered in the first year, followed by higher volumes in subsequent years.

Bharat Forge said the pace of deliveries will depend on the Indian Army's absorption and induction schedule, including the time required to train personnel and deploy the new artillery systems.

Capacity for 120-150 Artillery Guns

The company has also built capacity to manufacture around 120-150 artillery guns a year across different platforms, including mounted, wheeled and towed guns. This capacity gives it room to cater to multiple defence programmes as orders move into production.

The ATAGS programme is part of a broader increase in defence business for Bharat Forge. Its unexecuted defence order book stood at around Rs 10,950 crore as of September, including ATAGS, CQB and other defence orders.

Kalyani said the company expects a strong accretion to the defence order book in the second half of the financial year as programmes already won move towards contract finalisation.

Some of the defence contracts won during the past six to 12 months are also expected to start contributing to revenue in the second half of FY27, providing a boost to both revenue and profitability.

The company expects defence margins to remain in the 20-25% range depending on the product mix. Kalyani said margins could improve further as Bharat Forge moves towards more sophisticated products and fully filled ammunition (shell body to the high-energy explosives, propellants, and final filling).

ATAGS itself is expected to generate margins of around 20-22%, while higher-value products could add another 200-300 basis points or more to defence margins, according to the company.

High Value Manufacturing

The defence business is also part of Bharat Forge's broader strategy to increase the share of high-value manufacturing across its India operations. The company is simultaneously expanding its aerospace, semiconductor and industrial businesses, which have been operating close to capacity.

Bharat Forge said its India manufacturing business currently generates around Rs 3,000-3,400 crore of revenue per quarter and expects this to exceed Rs 5,000 crore per quarter by the end of next year. The company also expects margins to improve by around 200-250 basis points, depending on the business mix.

The company is investing around Rs 1,300 crore in a brownfield expansion at Baramati, which will add around 100,000 tonnes of forging capacity along with machining capacity. The expansion is expected to more than double output from the facility over the next two to three years.

The additional capacity will support aerospace, semiconductor and industrial businesses as well as other high-value programmes, while giving Bharat Forge additional headroom to execute its growing defence and non-automotive order pipeline.