FIIs bought 9,62,291 shares & Ashish Kacholia bought 25,000 shares of this multibagger forging stock: Company is likely to announce stellar annual results; details inside!

The stock gave multibagger returns of 175 per cent in just 1 year whereas BSE Small-Cap Index is up by 66 per cent.

Today, shares of Balu Forge Industries Ltd gained 6.76 per cent to Rs 262 per share from its previous closing of Rs 245.40 per share. The stock’s 52-week high is Rs 301 and its 52-week low is Rs 92.55. The shares of the company saw heavy buying in 3 straight trading sessions with a spurt in volume by more than 1.50 times on BSE today.  

Balu Forge Industries Ltd. is a manufacturer of precision-engineered forged components, including fully-finished and semi-finished crankshafts. Their products cater to a wide range of industries like automobiles, defence, railways, and even the new energy sector. The company not only adheres to the latest emission regulations and can produce components for new energy vehicles, but they are also actively researching new materials like lightweight alloys and advanced composites. This focus on innovation suggests they are looking to expand their product offerings and solidify their position in the railway and defence industries.

The company is likely to announce stellar results. Here’s why!

Looking at the nine-month results, the revenue from operations increased by 96.5 per cent to Rs 398.68 crore, EBITDA increased by 191.1 per cent to Rs 84.74 crore and profit after tax (PAT) increased by 176.2 per cent to Rs 65.39 crore in 9MFY24 compared to 9MFY23 whereas in its annual results, revenue from operations increased by 14.2 per cent to Rs 326.64 crore, EBITDA increased by 37 per cent to Rs 62.42 crore and profit after tax (PAT) increased by 30.4 per cent to Rs 38.91 crore in FY23 compared to FY22.

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The management believes that revenue is expected to conservatively grow in the range of 40 per cent to 45 per cent in FY24 over FY23, led by new customer additions in sectors like defence, railway, sustainable green energy components and commercial vehicles by expanding its product range through R&D and strategic investments, transforming into a more integrated company to reach new clients, regions, and markets. The EBITDA margins are expected to be in the corridor of 23 per cent to 24 per cent in the upcoming quarter on the back of the increasing scale of operations and efficiencies thereon. BFIL's client-centric approach, evident in new client acquisitions and the upcoming Mercedes Benz unit, positions it as a partner of choice and fuels its growth. This comprehensive strategy, including capacity expansion, technology adoption, innovation, and cost management, ensures BFIL's future readiness for sustained revenue growth and profitability.

As of March 2024, FIIs bought 9,62,291 shares and increased their stake to 9.71 per cent and Ashish Kacholia bought 25,000 shares and increased their stake to 2.14 per cent of this multibagger forging stock compared to 8.77 per cent and 2.11 per cent respectively in March 2023.

An ace investor, Ashish Kacholia, owns a 2.11 per cent stake in this company at Rs 115.45 per share.  From Rs 115.45 per share to Rs 271.15 per share, he already made gains of 135.73 per cent for each share that he bought in July 2023. Additionally, FIIs have increased their stake to 8.77 per cent in December 2023 compared to 6.48 per cent in September 2023.

The company has a market capitalization of Rs 2,660 crore and the shares of the company have an ROE of 22 per cent & an ROCE of 27 per cent. The stock gave multibagger returns of 175 per cent in just 1 year whereas BSE Small-Cap Index is up by 66 per cent. Investors should keep an eye on this small-cap stock.

Industry Outlook: The Indian metal forging market is expected to witness growth, increasing from USD 4.32 billion in 2022 to USD 8.80 billion by 2029, with a compounded annual growth rate (CAGR) of 10.69 per cent. Simultaneously, the global precision engineering machines market is anticipated to expand, projecting a size of USD 19.27 billion by 2028, compared to USD 12.33 billion in 2021.

Disclaimer: The article is for informational purposes only and not investment advice.