Balu Forge posts nearly 86% YoY rise in Q4 PAT; EBITDA margin at 21.33%

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Balu Forge Industries has reported 85.58% rise in net profit to Rs 28.28 crore on a 30.21% increase in revenue from operations to Rs 161.17 crore in Q4 FY24 as compared with Q4 FY23.

Total operating expenditure during the period rose by 22.96% year-over-year to Rs 126.79 crore.

EBITDA improved by 66.36% to Rs 34.38 crore while EBITDA margin rose by 464 bps to 21.33% in the fourth quarter.

Profit before tax in Q4 FY24 stood at Rs 82.29 crore, down by 54.9% from Rs 182.39 crore in Q4 FY23.

For FY24, Balu Forge has reported net profit and net sales of Rs 93.70 crore (up 140.24% YoY) and Rs 559.86 crore (down 71.40% YoY), respectively.

Trimaan Chandock, executive director of BFIL, stated: Working Capital days improved by 26 days from 177 in the previous reporting period to 151 days showcasing our continuous focus on streamlining receivables and increasing share of value added products where we can favourably negotiate lower credit days.

We have diversified our revenue stream to lower dependence on agro related industry and have increased our focus to serve other industries like defence, heavy engineering and green energy.

On capability augmentation front, the development of our newly acquired Mercedes Benz unit is progressing well on expected timelines and commercialization from said plant are expected to commence from Q2 FY25.

This unit will enable us to produce heavier and more complex components having relatively higher realizations and margins. Currently these assets are partially operational capacities and have contributed in a healthy revenue growth and expanded margins.

The management of Balu Forge expects revenue to conservatively grow in the range of 40.0%-45.0% in FY25 over FY24, led by new customer addition in sectors like railway and defence. EBITDA margins are expected to be in the corridor of 23.0%-24.0% in the upcoming quarter on the back of increasing scale of operations and efficiencies thereon. The manufacturing capacity is poised to rise from 18,000 TPA to 32,000 TPA with the commencement of Mercedes Benz's machining plant.

Balu Forge Industries is a 35-year-old company with prominent presence in specialized engineering solutions and production of precision machined components.

The scrip shed 0.49% to currently trade at Rs 302.25 on the BSE.

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