Ashish Kacholia stock with 60% revenue growth guidance for FY25 to keep on your radar

Shares of a leading precision engineering and manufacturing company engaged in the manufacturing of fully finished and semi-finished forged components hit a 20 percent upper circuit on BSE during Friday’s trading session. 

Price Movement

With a market cap of Rs. 6,592.23 crores, the shares of Balu Forge Industries Limited (BFIL) closed in the green at Rs. 602.35, compared to its previous closing price of Rs. 502.45. The stock hit its 52-week high at Rs. 890 on 24th September 2024, and compared to Friday’s closing price of Rs. 602.35, the stock is trading at a discount of nearly 32 percent. The stock has delivered multibagger returns of nearly 209 percent over a one-year period, while around 13 percent of positive returns in the last one month. 

Management Guidance

In FY25, the management anticipates revenue growth of approximately 55-60 percent compared to FY24, driven by the addition of new customers across sectors such as railways and defence. 

The company also projects EBITDA margins to remain within a conservative range of 25-27 percent for FY25, supported by an expanding scale of operations and enhanced efficiencies. By FY26, after the new plant becomes operational, EBITDA margins are expected to stabilize at a sustainable level of 30-32 percent. 

The company’s targeted focus is on high-value, critical components such as aerospace components, critical defence and railway components demonstrating a strategic alignment with global market demands. 

As India’s forging industry gains momentum from the China+1 and Europe+1 strategies, Balu Forge is prioritizing innovation and strategic partnerships to drive sustainable growth and global expansion. The company remains focused on new product development, leveraging advanced alloys and specialized material chemistries for niche market applications.

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Capacity Expansion

As of Q3 FY25, the integration of 7-axis CNC machining technology has strengthened Balu Forge’s ability to manufacture intricate, high-precision components. This expansion, funded through internal accruals, is set to drive growth across the aerospace, defence, and oil & gas sectors. 

Machining Capacity: BFIL currently has a capacity of 32,000 TPA for machined components. A further expansion of the machining capacity & introduction of new technologies is in process which will significantly enhance both the machining capability & capacity. 

Forging Capacity: With the acquisition of specialized assets, the company has increased its forging capacity by an additional 72,000 TPA. Further expansion efforts are underway to enhance the weight category of components produced and increase overall capacity, positioning BFIL among the elite global forging companies. 

Currently, the company can forge components weighing up to 1,000 kg using the closed-die hot forging method. Future advancements will further extend the weight range of forged products, strengthening the company’s market position. 

Strategic Partnerships

In Q3 FY25, Balu Forge entered into a Memorandum of Understanding (MoU) with Swan Energy Limited to establish a Special Purpose Vehicle (SPV) aimed at serving global industries, including defence, aerospace, railways, and nuclear. This strategic move strengthens the company’s position as a key player in high-growth, technology-driven sectors. 

Financial & Shareholding

Balu Forge experienced a significant growth in its revenue from operations, showing a year-on-year increase of around 74 percent from Rs. 147 crores in Q3 FY24 to Rs. 255.7 crores in Q3 FY25. 

Similarly, its net profit increased during the same period from Rs. 25.2 crores to Rs. 59 crores, indicating an impressive rise of nearly 134 percent YoY. EBITDA for Q3 FY25 increased by about 107 percent YoY to Rs. 67.7 crores, up from Rs. 3.3 crores in Q3 FY24. According to December 2024 shareholding pattern with the BSE, Ashish Kacholia holds a 1.73 percent stake in the company. 

About the Company

Balu Forge Industries Limited, formerly known as Amaze Entertech Limited, is engaged in manufacturing and supplying a wide range of fully finished and semi-finished forged crankshafts and forged components to OEMs worldwide with manufacturing facilities at Belagavi in Karnataka. The company generates more than 90 percent of its revenues through exports. 

Written by Shivani Singh

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