Shares of Balu Forge Industries (BFIL) hit a new high of Rs 679.95, as they rallied 5 per cent on the BSE in Friday’s intra-day trade. Today’s jump in the company’s stock price has extended the 13 per cent gain it had accrued in the previous three trading sessions.
The precision engineering and manufacturing company’s stock has soared 74 per cent in the past one month. It has zoomed 205 per cent from its June month low of Rs 223 on the BSE. The share price of Balu Forge has more than doubled, or surged 125 per cent from the level of Rs 302, since its listing on the National Stock Exchange (NSE) on May 14, 2024.
At 10:59 am; Balu Forge was trading 4 per cent higher at Rs 672, as compared to 0.06 per cent rise in the BSE Sensex. A combined nearly 1 million shares have changed hands on the NSE and BSE.
Investor Ashish Kacholia owned 2.19 million shares, or a 2.14 per cent stake in alu Forge at the end of the June 2024 quarter, according to shareholding pattern disclosed by the company.
BFIL is engaged in the manufacturing of fully finished and semi-finished crankshafts and forged components. It also has capacity to manufacture components conforming to both the New Emission Regulations and New Energy Vehicles specifications.
The company’s customers include major suppliers and manufacturers of light vehicles, agricultural equipment, power generation equipment, commercial vehicles, off-highway vehicles, ships, locomotives, among others. The company also caters to companies in the defence, oil and gas, railways, marine, and other sectors.
Since August 5, the stock price of Balu Forge has rallied 42 per cent after its board approved an issue of 4.5 million equity shares at an issue price of Rs 360 per share, aggregating to Rs 162 crore on a preferential basis to its non-promoter public category investors.
BFIL has allotted 1.2 million shares each to Ebisu Global Opportunities Fund and Nova Global Opportunities Fund PCC – Touchstone.
The management said the fund raising will strengthen its manufacturing capacity, enhance its capabilities, and play an incremental role in making India atmanirbhar/ self-reliant in sectors such as defence, railways and aerospace, among others.
The company’s earnings before interest, tax, depreciation, and amortisation (Ebitda) margins are expected to conservatively be in the vicinity of 23 per cent to 24 per cent for FY25, on the back of increasing scale of operations and efficiencies accrued from that.
Meanwhile, in the April to June quarter (Q1FY25), Balu Forge registered robust revenue growth of 55.99 per cent, with revenue from operations standing at Rs 175.3 crore compared to Rs 112.4 crore in Q1FY24. This was due to the company’s “constant focus on client addition and continued demand for its specialized engineering products.”
Balu Forge’s profit after tax grew by 104.96 per cent year-on-year (YoY) at Rs 34.12 crore, in the first quarter of financial year 2024-25.
Moreover, the Indian forging industry is undergoing a rapid transition and transformation, with superior implementation of the China+1 strategy to de-risk supply chains. “This diversification and macro change in industry landscape offers us a plethora of opportunities and provides a long runway for growth,” the management said.
The company has also said it is continuously evaluating inorganic growth opportunity in allied businesses.
First Published: Aug 23 2024 | 12:24 PM IST
