Bharat Forge expects deliveries of the Indian Army's order for 184 Advanced Towed Artillery Gun System (ATAGS) guns to begin in the first quarter of FY28, following the receipt of the long-awaited production approval.

The company clarified that the order itself had never been deferred, with the delay relating solely to the production clearance process, which consequently pushed revenue recognition from the program into FY28.

Management emphasised that the commencement of ATAGS deliveries should not be viewed as a prerequisite for the company's near-term growth trajectory. A range of defence contracts secured over the past six to twelve months, including engineering procurement projects, are expected to begin contributing during the second half of FY27, supporting both revenue growth and profitability.

The company remains confident of achieving its growth ambitions through a diversified portfolio that includes aerospace activities, industrial exports, semiconductor-related opportunities, commercial vehicle and passenger vehicle export programmes, marine projects, JSA and K-Drive initiatives. Management indicated that business momentum is expected to strengthen noticeably during the second half of FY27.

Regarding execution of the ATAGS contract, Bharat Forge expects deliveries to be spread across approximately four years. The initial year will largely focus on ramping up production and deployment, while the second and third years are expected to witness more stable delivery rates.

Management outlined an indicative delivery pattern beginning with roughly 10% of the order volume, followed by about 15%, then around 20%, with subsequent years accounting for similar volumes before the remaining balance is completed. However, the company stressed that the precise schedule will depend on the customer's absorption and induction plans rather than manufacturing capability alone.

A key factor influencing deployment will be the Indian Army's training and induction process. New artillery systems require battalion-level training and operational integration before acceptance, meaning deployment schedules will play an important role in determining the pace of deliveries and associated revenue recognition.

Bharat Forge stated that its manufacturing infrastructure is capable of producing approximately 120 to 150 large artillery guns annually across mounted, wheeled and towed configurations. As a result, the 184-gun ATAGS contract represents only a portion of the company's overall artillery production potential.

On profitability, management said the ATAGS program is expected to generate margins of around 20% to 22%, supported by strong asset turnover characteristics.

More broadly, margins within the defence business are expected to range between 20% and 25%, depending on the mix of products supplied.

The company noted that current defence margins are likely to remain around 20% to 21% under the existing product composition. However, management expects profitability to improve by at least 200 to 300 basis points as the portfolio evolves towards more sophisticated systems and fully filled ammunition solutions.

ATAGS therefore sits comfortably within the current defence margin profile, while future margin expansion is expected to be driven by a broader shift in product mix rather than by the artillery program alone.

The ATAGS program is widely regarded as one of India's most significant indigenous artillery developments. Designed as a 155mm/52-calibre gun system, it offers extended range, advanced automation and improved firepower compared with legacy artillery platforms, supporting the country's broader drive towards self-reliance in defence manufacturing and the expansion of domestically developed weapon systems.

Agencies