Balu Forge Industries Ltd has unveiled its financial and operational achievements for the third quarter of fiscal year 2024. The company experienced robust revenue growth of 55.7%, with revenue from operations reaching ₹1,470.75 Mn, a significant rise from ₹893.92 Mn recorded in the same period of fiscal year 2023.
Balu Forge Industries Ltd specializes in fabrication of precision machined components. Its core operations revolve around crafting both finished and semi-finished crankshafts alongside a diverse array of forged components. Nestled in Belgaum, Karnataka, the company’s precision machining unit boasts an extensive product portfolio servicing a broad spectrum of industries including automotive, maritime, aerospace, defense, oil and gas, railway, marine, prototypes, and beyond.
Currently equipped with the capacity to produce 18,000 tonnes of forged components annually, BFIL is poised for expansion to approximately 32,000 tonnes in forthcoming quarters. Moreover, bolstered by a dedicated R&D team comprising around 45 individuals, the company remains committed to innovation and advancement. With subsidiaries facilitating distribution networks spanning over 80 countries, BFIL operates within both domestic and international markets.
Furthermore, Balu Forge Industries Ltd witnessed a remarkable 72.1% surge in EBITDA, accompanied by an improvement in margins from 19.58% in Q3 FY23 to 22.24% in Q3 FY24. This positive margin trend was driven by the company’s scaled-up operations and heightened demand for its heavier product offerings, which typically yield more favorable margins.
Moreover, the company saw an enhancement in its profit after tax (PAT) margins, rising from 12.81% in Q3 FY23 to 17.31% in Q3 FY24. This improvement underscores Balu Forge Industries Ltd’s effective management strategies and adept response to market dynamics, resulting in strengthened financial performance and heightened shareholder value.
In terms of its performance over the first nine months of fiscal year 2024, revenue from operations for the company surged by an impressive 96.5%, reaching ₹3,986.85 Mn compared to ₹2,028.58 Mn in the same period of the previous fiscal year. EBITDA saw an increase of 191.1%, soaring from ₹291.08 Mn to ₹847.36 Mn, with margins showing improvement from 14.35% to 21.25%.
Profit after tax (PAT) also experienced a uptick, rising by 176.2% to ₹653.95 Mn in 9M FY24, compared to ₹236.74 Mn in 9M FY23, accompanied by a margin enhancement from 11.67% to 16.40%. Furthermore, progress on the development of the newly acquired Mercedes Benz unit is on track, with full-fledged operations expected to commence in Q4 FY24.
This acquisition will enable the company to manufacture heavier and more complex components, leading to enhanced realizations and margins. While the unit is currently operating partially, it has already contributed to achieving robust revenue growth and superior margins. These developments underscore the company’s commitment to excellence and its proactive approach to meeting evolving market demands, positioning it for sustained success in the competitive landscape.
In various sectors such as defense, railway, sustainable green energy components, and commercial vehicles, abundant opportunities are emerging, presenting significant potential for industry players. Leveraging their robust in-house R&D capabilities, the company is positioned to seize these opportunities and broaden its product offerings, as evidenced by its diverse product range.
Additionally, the company is making investments aimed at transitioning into a more integrated entity. These investments are expected to facilitate the acquisition of new clients, expansion into previously untapped regions, and the enrichment of its product portfolio. The company’s preparedness for the future is encapsulated in a strategy that integrates various elements.
This strategy includes continuous expansion of production capacities to meet projected demand and the incorporation of cutting-edge technologies to enhance operational efficiency and cost-effectiveness. As per industry reports, this strategic approach underscores the company’s readiness to capitalize on evolving market dynamics and solidify its foothold in the competitive landscape, setting the stage for continued success and prosperity.
In the fiscal year 2024, a conservative revenue growth forecast of 40.0%-45.0% over the previous fiscal year is anticipated, attributed to the acquisition of new customers within sectors such as railway and defense. Projections suggest that EBITDA margins are poised to fall within the range of 23.0%-24.0% for the upcoming quarter, driven by the expanding scale of operations and the consequent efficiencies gained.
