Bharat Forge & TASL Secure ₹6,900 Crore Contract for ATAGS & Gun Towing Vehicles

The Indian defence manufacturing ecosystem has taken a giant leap forward with the recent announcement of major procurement contracts awarded to Bharat Forge Limited and Tata Advanced Systems Limited (TASL) by the Ministry of Defence (MoD). The contracts, worth a total of ₹6,900 crore, showcase government's push to enhance indigenous defence capabilities and modernise the armed forces.

The contracts relating to the procurement of 155mm/52 calibre Advanced Towed Artillery Gun Systems (ATAGS) and high mobility 6x6 gun towing vehicles. ATAGS are intended to supplement the Indian Army's ageing, smaller-calibre guns with superior firepower, delivering greater accuracy and longer ranges. This procurement is significant as this is for the first time an indigenously designed and developed towed gun is being procured in a large number from private sector, thereby firming up the domestic defence manufacturing ecosystem in line with the nation’s vision of ‘Aatmanirbhar Bharat’ (self-reliant India).

Bharat Forge will produce 184 guns, about 60 per cent of the contract, in its plant at Jeguri and around Pune. TASL will manufacture the other 128 guns. The same production ratio will apply to the production of the gun towing vehicles, of which 327 vehicles are being procured, sources said. The ATAGS are expected to be delivered to the Indian Army in a timeframe of five years, according to the Ministry of Defence.

This move is likely to give a boost to the Indian gun manufacturing sector and the overall indigenous defence manufacturing ecosystem. The project, in line with the 'Make-in-India' initiative, would provide significant direct and indirect employment generation opportunities and contribute to economic development, the MoD said. With this latest agreement, the total value of capital procurement contracts signed by the MoD during the current financial year 2024-25 stands at ₹1.40 lakh crore.

Shares of Bharat Forge fell marginally by 0.18 per cent to ₹1182.25 in the last trading session, giving the company a market capitalisation of ₹56,522 crore. The shares are trading above their 10-day, 20-day and 50-day moving averages but below their 100-day, 150-day and 200-day moving averages. The company’s stock has provided 4.58 per cent and 54.66 per cent returns in the past one and two years, respectively.

Bharat Forge is recognised as a global leader in safety and critical components across diverse sectors such as automotive, railways, defence, construction & mining, aerospace, marine and oil & gas. Its operational segments comprise Forgings, Defence, and Other.

The Ministry of Defence also rewarded the ATAGS Project Director at the Defence Research and Development Organisation’s (DRDO) Armament Research and Development Establishment in Pune for his major contribution in the project’s fruition. The joint effort by DRDO and private sector companies, including Bharat Forge and TASL highlights the increasingly collaborative character of India's defence industrial base.

This important defence procurement contract is expected to keep Bharat Forge's stock in the headlines in the near term as well as impacting the Indian equity markets across other corporate developments. This and other initiatives to bolster defence and promote indigenous manufacturing cadre will be closely watched by investors.

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