Balu Forge Industries Ltd Q2 FY26: Forging Profits Hotter Than the Steel They Make — ₹2,995 mn Revenue, ₹650 mn PAT, OPM 28%, ROCE 31%, and Still No Smoke Breaks in Belgaum

1. At a Glance

Balu Forge Industries Ltd (BFIL) has officially become that rare Indian smallcap that can flex both biceps — growth and margins — without tripping on leverage. The company clocked₹2,995 millionin consolidated revenue forQ2 FY26, up34.4% YoY, while net profit jumped35.5%to₹650 million. TheOperating Profit Margin (OPM)stood tall at28%, with aROCE of 31.3%andROE of 25.4%, reminding every engineer why crankshafts deserve more love than crypto.

At amarket cap of ₹7,151 croreand aP/E of 29.3x, the market’s already giving them a decent “forged premium.” But hey, when you grow sales by49.8%and profits by79.7%in a year, you can afford to strut. The company’s debt is a mere₹81.5 crore, and with adebt-to-equity ratio of 0.07, even CA students call it “almost boring.” Balu’s story isn’t about flashy numbers—it’s aboutprecision,forging muscle, andmaking sure every ton of steel earns its keep.

2. Introduction

If you’ve ever wondered what happens when an engineering company actually engineers profits, meetBalu Forge Industries Ltd.In a world where “Make in India” often sounds like a WhatsApp forward, Balu Forge decided to make in Belgaum — and make it count.

Founded with the quiet confidence of a crankshaft designer, this company has turned hot metal into hotter margins. From manufacturing components that go insidetractors, defense vehicles, and power equipment, to now enteringaerospace and high-precision machining, Balu Forge has taken the “forge ahead” motto literally.

Their recent₹496.8 crore fundraiseandNSE mainboard listingin April 2024 have turned heads. And not without reason — FY24 saw revenues leap71%, EBITDA margins jump from15% to 21%, and inH1 FY25, they cranked it up to27%. That’s not just progress, that’sindustrial cardio.

The Belgaum-based beast now runsthree facilities, cranking out3.6 lakh crankshafts per year, serving25+ OEMs in 80+ countries, and showing up in sectors fromrailways to defense. The upcoming72,000-ton forging capacity expansionlooks set to make their hammering sound like a war drum for competitors.

3. Business Model – WTF Do They Even Do?

Let’s break this down like a gearbox.

Balu Forge Industries makesfully finished and semi-finished forged components, primarilycrankshafts,hydraulic parts,railway wheels, andtransmission clutches. Basically, anything that moves power from one part to another and doesn’t break — Balu’s involved.

Think of them as the unsung blacksmiths of modern industry — whether it’s atractor engine in Punjab, adefense vehicle in Ladakh, or arailway bogie in Chhattisgarh, there’s probably a Balu-forged part humming quietly inside.

Their secret sauce?Precision forging + CNC machining + metallurgy expertise.The company’s new7-axis CNC machining lineand16-ton hydraulic hammersetup mean they’re moving into the high-precision, high-margin league.

They’ve expanded from being an “auto-component supplier” to amulti-sector engineering house. Theindustry-wise revenue mixsays it all: Agriculture (45%), Power Gen (15%), Heavy Engg (12%), CV (10%), Defense (7%), and Others (11%). So basically, they’re everywhere — from your tractor clutch to defense jets’ drive systems.

And when the entire 32,000 TPA machining capacity isbooked solid, you know the customers aren’t just impressed—they’re hooked.

4. Financials Overview

Witty Commentary:Balu’s financials look like a well-oiled forging press — steady, rhythmic, and unstoppable. The EBITDA margin is at a muscle-bound 28%, proving that not all smallcaps are protein-deficient. EPS growth is so consistent it makes even CFOs tear up a little.

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