Ashish Kacholia Stock Posts Two-Fold Rise In Q3 Net Profit: Do You Own?

In an exchange statement on Saturday, Balu Forge Industries Ltd (BFIL) reported a more than two-fold jump in its consolidated net profit to Rs 25.4 crore for the December 2023 quarter, up from Rs 11.4 crore in the October-December quarter of 2022-2023. The total income of the firm climbed to Rs 148.9 crore, a 55% increase over Rs 92 crore in the same quarter last year. From Rs 89.39 Cr in Q3FY23 to Rs 147.07 Cr in Q3FY24, the company's net sales jumped by 64.52% YoY.

The company reported an EBITDA of Rs 32.71 Cr during the quarter under review which was Rs 17.50 Cr in the same quarter of the previous fiscal, representing a growth of 86.91% YoY.

Mr. Trimaan Chandock, Executive Director of BFIL stated, "We are happy to share our financial and business performance for Q3 FY24, we witnessed healthy revenue growth of 55.7% and revenue from operations stood at Rs 1,470.75 Mn in Q3 FY24 compared to Rs 893.92 Mn in Q3 FY23. This growth was led by our constant focus on client addition and continued demand for our products in the existing and new industries like railways, defense and heavy commercial vehicles. EBITDA grew by 72.1% and margins improved from 19.58% in Q3 FY23 to 22.24% in Q3 FY24 owing to increase in scale of operations and increased demand for heavier products which tend to yield better margins. PAT margins improved from 12.81% in Q3 FY23 to 17.31% in Q3 FY24."

"In terms of 9M performance, revenue from operations increased by 96.5% and stood at Rs 3,986.85 Mn in 9M FY24 compared to Rs 2,028.58 Mn in 9M FY23. EBITDA increased by 191.1% from Rs 291.08 Mn in 9M FY23 to Rs 847.36 Mn in 9M FY24, and margins improved to 21.25% from 14.35%. PAT increased by 176.2% and stood at Rs 653.95 Mn in 9M FY24 compared to Rs 236.74 Mn in 9M FY23, margins improved from 11.67% to 16.40% during the same period," he said.

"BFIL's dedication to prioritizing customers and fostering growth has not only bolstered our market position but has also led to the cultivation of strong relationships with clients, positioning us as partner of choice for supplying critical components. A testimony of our client centricity is evident in our recent additions of 3 new OEM clients," Trimaan Chandock added.

"Further, the development of our newly acquired Mercedes Benz unit is also progressing well on expected timelines and the full fledged operations are expected to commence from Q4 FY24. This unit will enable us to produce heavier and more complex components having better realizations and margins. Currently the same is partly operational and is aiding us in achieving good revenue growth along with superior margins," he further stated.

"On the industry front, we are seeing immense opportunity in various sectors like defense, railway, sustainable green energy components, and commercial vehicles. To seize these opportunities, we are leveraging our strong inhouse R&D capabilities to expand our product offerings and the testimony to same is depicted by our broad product range. Furthermore, we are spearheading investments to transform into a more integrated company. These investments will enable to us to acquire new clients, expand our presence in untapped regions and enhance our product portfolio," Trimaan Chandock said in a statement.

"In summary, our readiness for the future is characterized by a comprehensive strategy that harmoniously blends different facets. This encompasses ongoing expansion of our capacities to meet anticipated demand, alongside the implementation of new technologies to improve operational efficiency and cost-effectiveness. Furthermore, our dedication to pioneering innovation and careful cost management assures us to increase our prominence in the competitive landscape, paving the way for sustained revenue growth and enhanced profitability," he further added on the performance of Q3 FY24.

EBITDA margins are projected to be in the range of 23.0%-24.0% in the upcoming quarter due to growing operational scale and efficiencies, while revenue is anticipated to grow cautiously in the range of 40.0%-45.0% in FY24 over FY23, driven by new customer addition in sectors like railway and defence, according to management guidance.

During Q3FY24, ace investor Ashish Kacholia held 21,65,500 shares of Balu Forge Industries in his portfolio which is 2.11% of the total paid-up capital of the company.