Bharat Forge is advancing its strategy to transition its entire defence vertical to its subsidiary, Kalyani Strategic Systems Limited (KSSL). On July 31, the company announced that KSSL has received a perpetual license from the Department for Promotion of Industry & Internal Trade (DPIIT) to manufacture various defence products.

KSSL will produce these defence items at its Jejuri unit in Maharashtra. The DPIIT approval enables KSSL to participate in future defence programs, Bharat Forge stated in a regulatory filing.

KSSL has been actively collaborating with international partners, securing export orders worth $155.5 million. Notably, in August last year, KSSL exported India's first indigenously designed, developed, and manufactured artillery system. The company has also received multiple orders for ammunition shells, ensuring its capacity is filled for the next 2-3 years.

Bharat Forge has been leveraging its defence vertical to boost its order book and turnover. In FY24, the company secured approximately Rs 45 billionin defence orders out of a total of Rs 63 billion. Consequently, the defence revenue quadrupled in FY24 to Rs 15.61 billion, with over 90 % of this amount coming from exports. The company has previously informed investors that the strong order pipeline provides earnings visibility for the next three years.

"We are now building the capability to manufacture over 250 guns and 1,000 vehicles per annum. Our manufacturing ecosystem will be structured to exceed this capacity should the demand rise," the company shared in its annual report earlier in July.

In FY24, India's defence production reached Rs 747.39 billion, with private companies contributing 22 %, valued at Rs 164.11 billion. Defence exports rose to Rs 210.83 billion in FY24, marking a 32.5 % increase compared to the previous fiscal year.  

Looking ahead, the Defence Ministry aims to more than triple production to Rs 3 trillion and double exports to Rs 500 billion by FY29.

(Source: Moneycontrol)