Ashish Kacholia-backed Balu Forge shares jump 9% on robust Q1 results; check details

The specialised engineering solutions firm posted a more than twofold surge in net profit during the first quarter of the current financial year, to ₹34.16 crore. The figure has skyrocketed 104.95% year-on-year (YoY) from ₹16.67 crore in the same period last year.

Its profit after tax (PAT) margin improved significantly by 466 basis points (bps) in June 2024 ended quarter to 19.49% from 14.83% last year, while also rising from 17.55% in the quarter ending December 31, 2023.

Balu Forge Industries reported a sharp growth of 55.99% YoY in revenue from operations, at ₹175.3 crore in Q1 FY25 from ₹161.17 crore in the corresponding quarter of the previous fiscal year. This growth was led by the company’s constant focus on client addition and continued demand for specialized engineering products.

The precision machined components producing company witnessed a whopping 97.31% rise in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) at ₹43.2 crore during the April to June 2024 period compared to ₹21.89 crore in the year-ago period. The EBITDA margin expanded by 516 bps to 24.64% in Q1 FY25 from 19.48% last year.

The rally in Balu Forge Industries’ EBITDA and margins was led by an increase in the company’s scale of operations and a higher demand for heavier products, which tend to yield better margins.

Renowned market investor Ashish Kacholia owns a total of 21,90,500 equity shares of Balu Forge Industries, accounting for a 2.1% stake in the company, as per its latest shareholding pattern.

Further, the company’s Board of Directors recommended a final dividend of 1.5% of the face value per equity share of ₹10 each for the financial year 20224.

Balu Forge Industries expects its revenue to moderately grow in the range of 40% to 45% in the ongoing financial year (FY25) over FY24 on the back of new customer additions in sectors like railway and defence. The EBITDA margins are anticipated to conservatively be in the corridor of 23% % to 24% for FY25, led by increasing scale of operations and efficiencies.

Balu Forge Industries shares closed 3.6% higher at ₹510 per piece on the NSE.