Bharat Forge, RK Forgings under pressure as Class 8 truck orders fall for a second month

The share prices of Bharat Forge, Ramkrishna Forgings and GNA Axles were under pressure in early trade on December 6 as Class 8 truck orders in North America fell for the second straight month in November.

Class 8 truck orders stood at 34,300 in November, down from 42,500 in October and 56,000 in September. In fact, truck orders hit a record high in September but have since declined.

Class 8 truck orders are an important indicator of forging companies' business activity. North America accounts for almost 40 percent of Bharat Forge's total revenue. They make up 45 percent of GNA Axles’ export revenue and 40 percent of RK Forgings.

Class 8, or so-called severe duty, trucks have gross vehicle weight rating (GVWR) of more than 33,000 pounds. They are used as trailer tractors, single-unit dump trucks as well as fire trucks.

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At 9.45 am, Bharat Forge was quoting at Rs 838.25 on the National Stock Exchange, down 1.1 percent. RK Forgings was down 0.3 percent at Rs 234 and GNA Axles was trading flat at Rs 654 a share.

While the truck orders have declined on a month-on-month basis, they are up a whopping 254 percent from year on year.

Jonathan Starks, FTR’s chief executive officer and chief intelligence officer, said, “Much of the orders appear to have been slotted for production in 2023. That means further moderation of levels as we get into the new year."

"Production will be limited to some extent by supply chains and labour. However, the market remains strong despite the economic uncertainties," he added.For the year so far, Bharat Forge has gained 18 percent, RK Forgings is up 23 percent, while GNA Axles has shed 11 percent.