Balu Forge Industries Ltd. (BFIL), a prominent player in precision engineering and manufacturing, announced its audited consolidated financial results for the quarter ending September 30, 2024, during a board meeting on October 21, 2024.
In Q2 FY25, Balu Forge Industries Ltd. (BFIL) reported impressive financial results, achieving a remarkable 60.1% year-on-year revenue growth, bringing total revenue from operations to ₹2,228.7 million, up from ₹1,392.2 million in Q2 FY24.
This growth can be attributed to the company’s ongoing efforts to acquire new clients and the robust demand for specialized engineering products. Additionally, EBITDA experienced a substantial increase of 116.5%, with margins improving by 763 basis points from 21.6% in the previous year to 29.3% in the current quarter, reflecting enhanced operational scale and a rising demand for heavier products that command better margins. Furthermore, the company’s profit after tax surged by 106.9%, with PAT margins rising by 489 basis points from 16.7% in Q2 FY24 to 21.6% in Q2 FY25.
Mr Trimaan Chandock, Executive Director of BFIL, commented on the results: “The Indian precision engineering sector is poised for significant growth, driven by a global shift toward the China+1 strategy to mitigate supply chain risks. This transition, combined with broader industry changes, presents numerous opportunities for long-term growth. To capitalize on this momentum, we are making considerable investments to enhance our capabilities and ensure we achieve strong outcomes in the near future.
During the current quarter, we made significant strides in strengthening our operations to meet industry challenges and seize new opportunities. The progress at our new unit in Belgaum is on track, with the first phase of our manufacturing campus nearing commercialization, which will support our next growth phase.
We have a robust order book for existing and upcoming infrastructure, with the machining capacity of 32,000 tons expected to be fully utilized, including fulfilling orders for the Mercedes Benz production line. Our agreements in specialized areas such as Railways, Defence, and Aerospace will ensure a clear path for our 72,000 tons of forging capacity.
Additionally, we introduced our first 7 Axis CNC machine in our facilities in the first half of FY25. We’ve successfully reduced our working capital cycle from 137 days in H1 FY24 to 106 days in H1 FY25, enhancing our financial health and operational efficiency. Optimizing inventory management and improving our receivables process has resulted in a more balanced working capital structure, boosting liquidity and enabling reinvestment while reducing the need for external financing.
Overall, these operational improvements have not only stabilized our financial position but have also strengthened our competitive edge in the market. The reduction in debtor days from 177 days in H1 FY24 to 119 days in H1 FY25 further highlights our enhanced cash flow, making us a positive cash flow company in H1 FY25.
Looking ahead, we plan to expand our team significantly, aiming to exceed 1,000 personnel in the coming financial year, with a strong emphasis on our Research & Development teams to drive new product development and explore new material chemistries in line with the government’s infrastructure initiatives under the Viksit Bharat 2047 vision. In summary, the combination of reduced costs, improved production timelines, increased customer satisfaction, and a more agile supply chain lays a solid foundation for our future growth.”
Founded in 1989, Balu Forge Industries Ltd specializes in manufacturing fully finished and semi-finished forged components. The company is equipped to produce components that comply with both New Emission Regulations and New Energy Vehicles.
With a fully integrated forging and machining production infrastructure, BFIL offers a diverse product range from 1 kg to 1,000 kg. Balu Forge Industries operates a global distribution network of over 80 locations, serving both domestic and international markets, and caters to various industries, including defense, oil & gas, railway, and marine sectors.
