Ashish Kacholia-owned stock up 86% in 27 days; zooms 169% from March low

Shares of Balu Forge Industries hit a new high of Rs 415, surging 9 per cent on the BSE in Thursday's intra-day trade in otherwise a weak market.

Ashish Kacholia portfolio stocks: Shares of Balu Forge Industries (BFIL) hit a new high of Rs 415, surging 9 per cent on the BSE in Thursday’s intra-day trade in otherwise a weak market. In comparison, the BSE Sensex was down 0.21 per cent at 79,760 at 01:45 pm.

In the past 27 days, the stock of smallcap company has bounced back 86 per cent from Rs 223 touched on June 6.  It zoomed 169 per cent from level of Rs 154.55 on March 14, 2024. On the National Stock Exchange (NSE), BFIL has listed on April 29, 2024.

Investor Ashish Kacholia owned 2.19 million shares or 2.14 per cent stake in BFIL at the end of June 2024 quarter, according to shareholding pattern disclosed by the company.

What does Balu Forge Industries do?

BFIL, a prominent precision engineering company engaged in manufacturing of crankshafts & forged components, is pleased to announce the successful acquisition of three forging lines in a combination of Hammers & Presses capable of producing 72,000 tonnes p.a. of heavy forged products.

BFIL an integrated one stop solution provider for advanced machining solutions for critical industries viz. railways, defence, oil & gas, mining, aerospace, defence, aluminium & other critical precision industries globally.

BFIL in investor presentation said, a large part of the Capital Investment for the next 10 years is planned towards Defence Production with also key Joint Ventures / Technology Partnerships in the Pipeline. The key areas planned in the coming years are Artillery, Undercarriage parts for Armored Vehicles, Weapons & Ammunition for Light & Heavy regiments and Forged & Machined Components for the Engine Division.

Defence System Production

There is a Dedicated Unit planned for Ammunition & Advance Defence System Production in partnership with prominent players in the Global Defense Production Mix. In Addition to the Dedicated Defence Production Facility, the R&D & Innovation Campus in Belgaum, India will spearhead the stratergy laid down to build Advance Defence systems & solutions, the company said.

BFIL further said the company has evolved to produce a wide range of wheels, axles & wheel sets to meet the needs of its customers.  The company meets the bulk requirements for locomotives, passenger vehicles, freight vehicles & other coaching vehicles in terms of wheels, axles & wheel sets. The company has successfully initiated supplies to Indian Railways & successfully negotiated a long term contract with a Middle Eastern nation.

Balu Forge Industries turnover

Meanwhile, BFIL had recorded strong growth in the fiscal 2024 (FY24) of 71 per cent over fiscal 2023 mainly driven by ramp up of enhanced capacity and continued product additions.

While the volume sales improved due to the better utilization of the manufacturing capacities, realizations has also improved on account of higher sales of heavy products.  With the steady order flow from the existing customers and continuous addition of new customers the scale of operations are expected to sustain and grow over the medium term, CRISIL Ratings said.

BFIL has a diversified customer base with top 10 customers contributing to around 43 per cent of the total sales in FY24 (48 per cent in FY23 and 50 per cent in FY22). The company has been associated with these customers for a long period of time. Moreover, no single customer contributes to more than 10 per cent of the total sales. BFIL has low risk related to customer concentration risk with no customer contributing more than 10 percent of revenue, the rating agency said in rationale.