Bharat Forge Shares Decline 4% as US EPA Reverses Green Norms

Highlights:

• Bharat Forge shares tumbled 4% on March 13 amid growing concerns over potential demand disruptions in the Class 8 truck segment in the United States.
• The US Environmental Protection Agency (EPA), under Administrator Lee Zeldin, announced the rollback of 31 environmental regulations, including greenhouse gas (GHG) emission norms for heavy-duty vehicles.
• This development jeopardizes the anticipated pre-buy demand for Bharat Forge’s Class 8 truck components, which was expected to surge in 2026 ahead of stricter 2027 regulations.
• Class 8 truck sales account for approximately 15% of Bharat Forge’s standalone revenue, making this policy shift a major concern for investors.

US EPA’s Regulatory Rollback Sparks Uncertainty for Bharat Forge

The US Environmental Protection Agency’s decision to reconsider emission standards for heavy-duty trucks has sent shockwaves across the commercial vehicle industry, with Bharat Forge emerging as one of the major casualties in the Indian stock market. The company’s shares fell 4% to Rs 1,010.35 on the BSE during intraday trading on March 13, reflecting investor anxiety over potential revenue disruptions.

EPA Administrator Lee Zeldin, in a policy reversal, announced the withdrawal of 31 environmental rules imposed during the Biden administration. These rules, aimed at curbing pollution from coal-fired power plants and setting stricter emission standards for commercial vehicles, were seen as a stepping stone toward a cleaner transportation ecosystem and electric vehicle (EV) adoption.

However, the latest decision by the Republican-led EPA signals a major shift in US climate policy, with the focus shifting from stringent emission mandates to deregulation and economic competitiveness.

Impact on Bharat Forge’s Class 8 Truck Component Business

The rollback has sparked worries about the anticipated surge in pre-buy demand for Class 8 trucks in 2026, which Bharat Forge had expected to drive strong revenue growth. The original EPA norms, which were scheduled to take effect in 2027, were expected to push truck manufacturers to accelerate purchases in 2026, leading to an increase in orders for Bharat Forge’s components used in heavy-duty commercial vehicles.

With the future of these regulations now uncertain, the likelihood of this demand surge materializing has weakened, potentially affecting Bharat Forge’s growth projections for FY26 and FY27.

According to Bharat Forge’s management, a policy-induced pre-buying cycle was expected to lift Class 8 truck demand significantly in 2026. However, if EPA’s rollback prevents these regulations from being implemented in 2027, the expected demand surge may not materialize, affecting Bharat Forge’s sales volumes, production planning, and revenue outlook.

Why EPA’s Reversal Matters for the Global Commercial Vehicle Market

The US Class 8 truck market is a crucial segment in the global commercial vehicle industry, influencing demand for critical powertrain, chassis, and drivetrain components. Bharat Forge, which has established itself as a key supplier in the sector, was positioned to capitalize on the anticipated spike in truck orders before the implementation of stringent emission rules.

Now, with the EPA rolling back the green mandates, truck manufacturers may no longer feel the urgency to front-load purchases, leading to a more gradual demand pattern instead of a sharp pre-buying wave in 2026.

Additionally, the rollback may impact investment decisions in cleaner technologies, including battery-electric and hydrogen-powered trucks, which were expected to gain traction under the previous regulations.

Statements from US EPA and Industry Leaders

In an official statement, the US EPA justified its decision, arguing that the previous administration’s regulatory framework imposed excessive compliance costs on businesses, which could hinder economic growth and burden consumers.

“Zeldin announced the agency will reconsider the Model Year 2027 and Later Light-Duty and Medium-Duty Vehicles regulation and Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles. In addition to imposing over $700 billion in regulatory and compliance costs, these rules provided the foundation for the Biden-Harris electric vehicle mandate that takes away Americans’ ability to choose a safe and affordable car for their family and increases the cost of living on all products that trucks deliver,” the agency said in its official statement.

Zeldin further emphasized that the policy reversal would reduce financial strain on manufacturers while promoting American manufacturing and job creation.

“The American auto industry has been hamstrung by the crushing regulatory regime of the last administration. As we reconsider nearly one trillion dollars of regulatory costs, we will abide by the rule of law to protect consumer choice and the environment,” said Lee Zeldin, EPA Administrator.

Market Response and Stock Performance

Bharat Forge’s stock performance on March 13 reflected growing investor concerns over the potential slowdown in demand for Class 8 trucks in the US market. The stock, which opened at Rs 1,050, dropped to an intraday low of Rs 1,010.35, before recovering slightly to Rs 1,025 by mid-session trading.

Despite the decline, analysts remain divided on Bharat Forge’s long-term outlook. Some experts believe that the company’s diversified product portfolio and expansion into EV components will help offset short-term disruptions, while others caution that the uncertain regulatory environment in the US poses downside risks to earnings in the next two years.