Balu Forge Industries Earnings press release Q3 FY24

About Balu Forge Industries Ltd (“BFIL” or the “Company”):

Ø   Balu Forge Industries Ltd is one of the prominent companies in India for

producing precision machined components.

•        It is engaged in the manufacturing of finished and semi-finished crankshafts and various other forged components and has a strong clientele comprising of 25+ OEM’s.

Ø   The Company boasts of a precision machining unit with a comprehensive product range which caters to customers across various industries such as automobiles, ships, locomotives, aerospace, defence, oil and gas, railway, marine, prototypes and others.

Ø   BFIL facility is located in Belgaum, Karnataka and has an existing capacity to produce 18,000 tonnes forged components per annum which will be expanded to ~32,000 tonnes in the coming quarters.

•        Further, the company has R&D team comprising of ~45 people

Ø   BFIL through its subsidiaries has distribution network in over 80+ countries

and operates in export and domestic markets

Management Guidance:

Ø   Revenue is expected to conservatively grow in the range of 40.0%-45.0% in FY24 over FY23, led by new customer addition in sectors like railway and defence.

Ø   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

Management Commentary:

Commenting on the performance of Q3 FY24, 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 ₹1,470.75 Mn in Q3 FY24 compared to ₹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 ₹3,986.85 Mn in 9M FY24 compared to ₹2,028.58 Mn in 9M FY23. EBITDA increased by 191.1% from ₹291.08 Mn in 9M FY23 to ₹847.36 Mn in 9M FY24, and margins improved to 21.25% from 14.35%. PAT increased by 176.2% and stood at ₹653.95 Mn in 9M FY24 compared to ₹236.74 Mn in 9M FY23, margins improved from 11.67% to 16.40% during the same period

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.

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.

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.

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

Another Set of Robust Financial Performance

Revenue for 9M FY24 increased by 96.5% over 9MFY23

PAT for 9M FY24 increased by 176.2% over 9MFY23 and exceeded full year FY23 PAT

 

Consolidated P&L Statement

Particulars (Rs. Mn)	Q3 FY24	Q3 FY23	YoY%	Q2 FY24		9M FY24	9M FY23	YoY%
Revenue from Operations	1,470.75	893.92	55.7%	1,392.25		3,986.85	2,028.58	96.5%
Other Income	18.64	26.23		40.61		60.32	120.97
Total Income	1,489.39	920.15	55.7%	1,432.86		4,047.17	2,149.55	88.3%
Total Expenses excl. D&A & Finance Cost	1,143.61	718.86		1,090.99		3,139.49	1,737.50
EBITDA (Excluding Other Income)	327.14	175.05	72.1%	301.25		847.36	291.08	191.1%
EBITDA Margin (%)	22.24%	19.58%		21.64%		21.25%	14.35%
Depreciation & Amortization	5.13	3.16		4.59		14.32	8.91
Finance Cost	38.63	27.56		37.65		101.07	70.16
PBT before Exceptional Item	302.01	170.56		299.62		792.29	332.98
Exceptional Items	-	-		-		-	-
PBT	302.01	170.56		299.62		792.29	332.98
Tax	47.47	56.04		66.92		138.35	96.24
PAT	254.55	114.52	103.2%	232.70		653.95	236.74	176.2%
PAT Margin %	17.31%	12.81%		16.71%		16.40%	11.67%
Other comprehensive (profit)/ loss	-0.34	-0.16		0.57		0.28	0.524
Net PAT	254.21	114.36		233.27		654.22	237.27
Diluted EPS (In Rs.)	2.57	1.37		2.47		6.61	2.84