Balu Forge Industries Ltd. (BFIL) has announced robust consolidated financial results for the quarter ending September 30, 2024, following a board meeting on October 21, 2024. The company reported a remarkable 107% increase in its net profit, reaching ₹48 crore compared to ₹23 crore during the same period last year.
Key Financial Highlights:
- Revenue: BFIL’s revenue stood at ₹223 crore for the quarter.
- EBITDA Growth: The company experienced a significant 116.5% growth in EBITDA, with margins expanding by 763 basis points, rising from 21.6% in Q2 FY24 to 29.3% in Q2 FY25.
Strategic Insights:
Mr. Trimaan Chandock, Executive Director of Balu Forge Industries, attributed this performance to the imminent growth phase in the Indian precision engineering industry. He highlighted the global shift towards the China+1 strategy, which is driving companies to mitigate supply chain risks and unlock new opportunities. To capitalize on this momentum, BFIL is making substantial investments to strengthen its operational capabilities.
Operational Developments:
- Manufacturing Expansion: The new manufacturing campus in Belgaum is progressing well, and the company is nearing the commercialization of its first phase. This facility is expected to support significant growth, with an order book capable of fully utilizing 32,000 tons of machining capacity.
- Specialized Domains: BFIL has secured agreements for 72,000 tons of forging capacity across specialized sectors such as Railways, Defence, and Aerospace. Additionally, the company has introduced its first 7-axis CNC machine to enhance production capabilities.
Efficiency Improvements:
BFIL has successfully reduced its working capital cycle from 137 days in H1 FY24 to 106 days in H1 FY25. This has positively impacted the company’s financial health and operational efficiency, enabling better inventory management, enhanced receivables processes, and streamlined payables. The reduction in debtor days from 177 to 119 has further improved liquidity and cash flow, establishing BFIL as a positive cash flow company for H1 FY25.
Workforce and R&D Focus:
Looking ahead, BFIL plans to expand its workforce to over 1,000 employees in the coming financial year, with a special emphasis on Research & Development for new product development and materials. The company aims to align its growth with the infrastructure push under Prime Minister Narendra Modi’s Viksit Bharat 2047 initiative.
Overall, Balu Forge Industries’ strategic investments, improved operational efficiencies, and market positioning have laid a strong foundation for sustained growth in the future. The company continues to adapt to industry changes while enhancing customer satisfaction and supply chain agility.
Disclaimer: The information contained in this report is for informational purposes only and is not intended as financial advice. While efforts have been made to ensure the accuracy and reliability of the data presented, Balu Forge Industries Ltd. and its representatives make no guarantees regarding the completeness, accuracy, or timeliness of the information. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results, and all investments carry inherent risks.
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