Ashish Kacholia Portfolio Stock Posts 85% Growth In Q4 Net Profit: Do You Own?

Manufacturing crankshafts and other forged components are the business of India-based Balu Forge Industries Limited. The financial results for the quarter and year ending March 31, 2024, have been released by the Ashish Kacholia portfolio stock.

Balu Forge Industries' net profit jumped 85.56% to Rs 28.28 crore in the quarter that ended in March 2024 from Rs 15.24 crore in the quarter that ended in March 2023. In Q4FY24, sales jumped 30.21% to Rs 161.17 crore from Rs 123.78 crore in Q4FY23. Net profit for the entire year climbed to Rs 93.67 crore in the year that ended in March 2024 from Rs 38.91 crore in the year that ended in March 2023, a 140.74% growth. Sales for the year ended March 2024 surged 71.40% to Rs 559.86 crore from Rs 326.64 crore in the year prior ending March 2023.

The Board of Directors of the company on Tuesday approved the appointment of Mr. Sadik Patel as Chief Operating Officer (COO) of the company with effect from 14th May, 2024 as recommended by the Nomination & Remuneration Committee.

Commenting on the performance of FY24, Mr. Trimaan Chandock, Executive Director of Balu Forge Industries Limited (BFIL) said, "We are happy to share our financial and business performance for FY24, we registered robust revenue growth of 71.40% and revenue from operations stood at %5,598.56 Mn in FY24 compared to %3,266.39 Mn in FY23 owing to our constant focus on client addition and continued demand for our specialized engineering products in the existing and new industries like railways, defense and heavy commercial vehicles. EBITDA grew by 139.31% and margins expanded by 604 bps from 15.24% in FY23 to 21.28% in FY24 owing to increase in scale of operations and increased demand for heavier products which tend to yield better margins. PAT margins improved by 482 bps from 11.91% in FY23 to 16.73% in FY24."

"On capability augmentation front, the development of our newly acquired Mercedes Benz unit is progressing well on expected timelines and commercialization from said plant are expected to commence from Q2 FY25. This unit will enable us to produce heavier and more complex components having relatively higher realizations and margins. Currently these assets are partially operational capacities and have contributed in a healthy revenue growth and expanded margins. In order to reap the best results of our focused approach, we are pursuing a five-pronged strategy to propel the next phase of growth at BFIL, focusing on expanding market presence, seizing new opportunities, increasing the share of value-added and more complex products in our revenues," the executive director of Balu Forge Industries stated.

Based on the management guidance, revenue is expected to conservatively grow in the range of 40.0%-45.0% in FY25 over FY24, led by new customer addition in sectors like railway and defence. EBITDA margins are expected to be in the corridor of 23.0%-24.0% in the upcoming quarter on the back of increasing scale of operations and efficiencies thereon. The manufacturing capacity of Balu Forge Industries is poised to rise from 18,000 TPA to 32,000 TPA with the commencement of Mercedes Benz's machining plant. Management endeavors to further expand manufacturing capacity, as per a regulatory statement.