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Balu Forge Industries Ltd
NSE: BALUFORGE BSE: 531112 INE011E01029 Industrials Industrial Products 🔎 Screen
Microcap 250
₹6,464 Cr
Market Cap
21.8
P/E
0.25
PEG
22.7%
ROCE
19.6%
ROE
0.10
D/E
26.5%
OPM
-23.4%
% from 52W High
57
α RS
🔍 BALUFORGE is showing a high-conviction setup because it matches 7 of 37 tracked screener presets, an ECS of 51.6 last quarter, and consistent_margins preset's Backtest win rate is 55% over 90 days. Net: Broad signal stack, not a recommendation. ? Conviction ECS Backtest
Sources
Conviction 7/37 · ECS 51.6 · Backtest win rate 55%
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About

Balu Forge Industries Ltd is engaged in the manufacturing of fully finished and semi-finished forged crankshafts and Forged Components. It has the capability to manufacture components conforming to the New Emission Regulations & the New Energy Vehicles

✓ Strengths 1
  • Company has delivered good profit growth of 102% CAGR over last 5 years
! Concerns

No concerns data yet.

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Mixed: FY26 annual results showed robust 19.9% revenue growth and 27% PAT growth, but Q4 FY26 revenue declined 2.3% YoY and EBITDA margin contracted 20bps, while net debt turned positive for the first time in two years. quarter Investor Presentation One-Pager? Jun 2026
Revenue
₹1,107.4 Cr
+19.9% YoY; Q4 fell 2.3% to ₹263.6 Cr
EBITDA Margin
27.0%
−20bps YoY; Q4 margin 22.7%, down from 27.8% last year
PAT
₹258.9 Cr
+27.0% YoY; Q4 PAT up 4.9% due to other income
Net Debt/Equity
0.02x
Reversed from (0.06)x net cash; net debt ₹37.7 Cr
What Went Right
  • FY26 revenue grew 19.9% to ₹1,107.4 Cr, driven by 19.3% EBITDA growth to ₹299.5 Cr.
  • PAT improved 27% to ₹258.9 Cr, with PAT margin expanding to 22.7% from 21.7%.
  • Defence/Aerospace/Railways revenue share rose to 13% of revenue (FY24: 5%) and 50% of order book, including a 5-year large-calibre ammunition MoU and first aerospace order.
  • Capacity expansion on track: forging capacity to increase from 100,000 to 150,000 MTPA; machining from 45,000 to 80,000 MTPA, with a new 360,000 shells/year line commercialized.
  • ICRA credit rating upgraded to [ICRA]A-(Stable) / A2+, reflecting improved financial profile.
What to Watch
  • Q4 FY26 revenue declined 2.3% YoY and 15.3% QoQ, indicating a sluggish quarter.
  • EBITDA margin in Q4 fell to 22.7% from 27.8% a year ago, under pressure from elevated raw material costs and perhaps product mix shifts.
  • Net debt turned positive at ₹37.7 Cr (FY25: net cash ₹60.3 Cr) as borrowings surged to ₹1,267 Mn from ₹359 Mn, largely to fund capex.
  • Working capital days jumped to 140 from 104, driven by a sharp increase in trade receivables (₹425 Cr vs ₹327 Cr) and inventories (₹145 Cr vs ₹98 Cr).
  • ROCE halved to 21.7% from 30.1% and ROE dropped to 19.6% from 25.4%, reflecting higher equity base and lower capital efficiency.
Management Guidance
  • Forging capacity to increase from 100,000 MTPA to 150,000 MTPA; machining capacity from 45,000 MTPA to 80,000 MTPA.
  • Defence, Aerospace & Railways targeted to become a larger share of revenue mix (currently 13% of revenue, 50% of order book).
  • ESG targets: 100% renewable energy by 2035, net zero emissions by 2040, zero liquid discharge by 2037.
Investor Lens
The FY26 results indicate strong annual growth but a weak Q4 exit, raising questions about near-term momentum. The sharp increase in borrowings and working capital days, alongside declining ROE/ROCE, suggest the company is investing heavily in capacity before revenue scales. The 50% order book share from defence/aerospace provides long-term visibility, but investors should watch Q1 FY27 cash conversion, margin recovery, and debt paydown. The 5-year ammunition MoU is a key catalyst, but execution risk remains given the nascent defence segment.
From investor presentation · AI-generated analysis · Not investment advice
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📊 MIXED Revenue up 29% but OPM slips to 28%; PAT flat QoQ at ₹66 Cr
Revenue
Revenue grew 29.2% YoY to ₹301.0 Cr, with a strong 14.0% sequential acceleration. The topline expansion is healthy, though operating profit grew slower at 18.1% YoY.
Profitability
Net profit rose 15.8% YoY to ₹66.0 Cr, with EPS improving from ₹5.00 to ₹5.44. PAT was flat sequentially despite higher revenue, reflecting margin pressure. Tax rate stood at 18%.
Margins
OPM came in at 28%, down from 31% in Jun 2025 but up from 23% in Mar 2026. The YoY margin contraction suggests input cost or pricing pressure, though the sharp QoQ recovery is a positive.
Cash Flow
No cash flow data provided; CFO quality cannot be assessed from the P&L alone.
Balance Sheet
Debt-to-equity is low at 0.1, indicating a comfortable leverage position. ROCE of 22.7% and ROE of 19.6% reflect efficient capital use.
Key Risks
YoY OPM fell 300 bps, signaling margin pressure. PAT flat QoQ despite 14% revenue growth could indicate rising costs or pricing issues. The stock trades at ~20x PE, leaving limited room for earnings disappointment.
Outlook
Continued revenue momentum and QoQ margin recovery could support profitability. Sustaining 29% topline growth while restoring YoY margins will be key for earnings quality.
Generated by AI · Jun 2026 results · Not investment advice
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