InFocus Finance

Balu Forge Industries EBITDA Up 106.95%, Margins Expand to 26.47%

EBITDA grew by 106.95% and margins expanded by 422 bps from 22.24% in Q3FY24 to 26.47% in Q3FY25 owing to increase in scale of operations and increased demand for heavier products which tend to yield better margins.

SMEStreet Edit Desk

08 Feb 2025 10:33 IST

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Balu Forge Industries Ltd. (BFIL), a leading precision engineering and manufacturing company, approved its unaudited Consolidated Financial Results for the quarter ended 31st December 2024, in the meeting of its Board of Directors held on 7th February 2025.

*Amount in Mn

Particulars (in ₹ Mn)	Q3FY25	Q3FY24	% increase
Revenue	2,557.83	1,470.75	73.91%
PAT (Profit After Tax)	590.06	252.07	134.09%
EBITDA (Earnings before Interest, Tax, Depreciation, and Amortisation)	677.00	327.14	106.95%
Total Comprehensive Income	604.35	254.21	137.74%

Consolidated Financial Highlights for the Q3 FY25:

1. BFIL registered a robust revenue growth of 73.91% YoY and revenue from operations stood at INR 2,557.83 Mn in Q3FY25 compared to INR 1,470.75 Mn in Q3FY24 because of the constant focus on client addition and continued demand for the specialized engineering products.

2. EBITDA grew by 106.95% and margins expanded by 422 bps from 22.24% in Q3FY24 to 26.47% in Q3FY25 owing to increase in scale of operations and increased demand for heavier products which tend to yield better margins.

3. PAT grew by 134.09% and PAT margins improved by 528 bps from 16.95% in Q3FY24 to 22.24% in Q3FY25.

Commenting on the performance of Q3FY25, Mr. Trimaan Chandock, Executive Director of BFIL stated:

We are pleased to report strong performance for Q3FY25, with revenue growing 73.91% to INR 2,557.83 Mn in Q3FY25, from INR 1,470.75 Mn in Q3FY24, driven by a robust demand for our specialized engineering products. EBITDA increased by 106.95% to INR 677.00 Mn in Q3FY25 as compared to INR 327.14 Mn, with EBITDA margins expanding by 422 bps from 22.24% in Q3FY24 to 26.47% in Q3FY25, supported by operational efficiencies and a focus on high-margin value added niche products.'

PAT grew 134.09% from INR 252.07 Mn in Q3FY24 to INR 590.06 Mn in Q3FY25, with PAT margins improved by 528 bps from 16.95% in Q3FY24 to 22.24% in Q3FY25.

For 9M FY25, revenue grew 64.03% to INR 6,539.71 Mn, compared to INR 3,986.85 Mn in 9M FY24. EBITDA increased 107.85% to INR 1,761.26 Mn in 9MFY25 as compared to INR 847.36 Mn in Q3FY24, with EBITDA margins expanding by 568 bps from 21.25% in 9M FY24 to 26.93% in 9MFY25. PAT grew by 116.34% to INR 1,411.67 in 9MFY25 as compared to INR 652.53 Mn in 9MFY24, with PAT margins improved by 504 bps from 16.13% in 9MFY24 to 21.17% in 9MFY25.

These results highlight our resilient business model and strong market positioning, setting the stage for continued growth. Our success stems from strategies like portfolio expansion, client diversification, and delivering solutions across key sectors. As the Indian forging industry benefits from China+1 and Europe+1, Balu Forge is investing in innovation and partnerships for sustainable growth and global expansion.

In addition to our financial performance, this quarter saw significant advancements in strategic initiatives:

• Strategic Partnerships for High-Growth Industries

We have signed a Memorandum of Understanding (MoU) with Swan Energy Limited to create a Special Purpose Vehicle (SPV) focused on serving global industries, including defence, aerospace, railways, and nuclear. This strategic diversification positions us as a prominent player in high-growth, technology- driven sectors.

• Capacity Expansion with Advanced Technology

The integration of 7-axis CNC machining technology strengthens Balu Forge’s capability to produce intricate, high-precision components. This expansion, financed through internal accruals, is poised to fuel growth in the aerospace, defence and oil & gas sectors.

• Focus on Critical Components

Our targeted focus on high-value, critical components such as aerospace components, critical defence and railway components demonstrates a strategic alignment with global market demands.

We are pleased to inform the stakeholders of the company that the green field manufacturing campus commissioning is in full swing & will house a fully automated plant with modern technology, larger integration of Industry 4.0, installation of a solar farm for energy saving, plant commissioning as per the latest ISO standards, Implementation of 5S & TPM practices & Implementation of OSHA standards.

In conclusion, our focus on cost optimization, enhanced production efficiency, and a more agile supply chain has established a robust platform for sustainable growth. Leveraging our advanced engineering capabilities and ongoing innovation, we are strategically positioned to capitalize on emerging market opportunities and generate long-term value. Our steadfast commitment to operational excellence and customer satisfaction reinforces our competitive advantage in the industry.

Management Guidance:

We continue to maintain the guidance for FY25 as below:

· Revenue is expected to grow in the range of 55% - 60% in FY25 over FY24, led by new customer addition in sectors like railway and defence.

· EBITDA margins are expected to conservatively be in the corridor of 25% -27% for FY25 on the back of increasing scale of operations and efficiencies thereon. The same will be at a sustainable level of 30% - 32% for FY26 after commercialisation of the new plant.

Balu Forge Industries Ltd EBITDA