A young company with promising future
Small cap series – 1
Balu Forge Industries
About the Company:-
Balu Forge Industries Ltd is engaged in the manufacturing of fully finished and semi-finished forged crankshafts and Forged Components. It has the capability to manufacture components conforming to the New Emission Regulations & the New Energy Vehicles.
Within the last few decades, the company has expanded its presence to over 80 countries. Balu Forge was the first company in India to mass-produce Crankshafts suitable for Tractors, Trucks, and Passenger car applications
Segments:
1. Crankshafts
2. Railway Wheels
3. Transmission & Clutches
4. Chassis
5. Oil,Gas & Flow Control
6. Hydraulic Motors
7. Brake Parts
Recent Capacity Expansion:
Balu Forge Industries Ltd has announced that it is in the process of setting up a new 52,000 Sg.mt manufacturing facility in Belgaum, Karnataka. This new facility will house a state-of-the-art precision engineering centre that will increase efficiency in production and enable an extension of the existing product portfolio to enhance the company’s offering in both the ICE & the new energy sphere.
The new manufacturing campus will consist of a range of key production units for example a precision machining & Forging centre, a defence production unit, dedicated railway wheel & axle production unit & a unit with key emphasis on the components for the new energy & mobility industry which will enable BFIL to expand its product portfolio and cater to new industries.
The defence production unit will focus on the production of undercarriage parts & heavy forging components for the global defence industry. The rail wheel, axle & wheelset production unit will cater to the growing demand for railway systems & solutions both domestically and abroad. The new energy components unit will allow BFIL to expand its reach into the new energy sector. The company will focus on building key expertise in fuel agnostic systems & components to further widen & balance the overall product mix.
We believe with recent capacity expansion the next phase of growth has begun & company will gradually acquire good chunk in Railway & Defence ( BATS- Balu forge technologies and system ) industries components.
The company has incorporated 2 new wholly-owned subsidiaries Naya Energy Works Private Limited on 7 July 2021 & Balu Advanced Technologies & Systems Private Limited on 15 July 2021
Financials
Balu forge is consistently growing in their business in recent years
The revenue grew from 82 – 293 cr in mere 2 years
And PAT from 1.82 to 30.16cr.
Looking upon the financials there is still a best level and should pursue investing at with high risk level and on correction.
Risk
– Any slowdown in Domestic economy will impact the growth of the company.
Conclusion:
The company is poised to grow well so investors can buy small amounts on dips and will benefit from the order, defence and chemicals ( battery ) from onwards.
