Balu Forge Industries Limited (NSE: BALUFORGE, BSE: 531112), an Indian precision engineering and forged components manufacturer, reported a strong set of earnings for the second quarter of FY26, marked by double-digit growth across revenue and profit metrics. For the three-month period ending 30 September 2025, the company’s consolidated revenue from operations rose 34.4 percent year-on-year to ₹2,995 million. Profit after tax expanded by 35.5 percent to ₹650 million, while earnings before interest, tax, depreciation, and amortisation came in at ₹828 million, reflecting a 27.0 percent annual increase.
The financial results reflect a continuation of the company’s momentum in both operational scale and strategic verticals, especially its newly commercialised defence business. Balu Forge Industries Limited noted that its greenfield manufacturing facility in Hattargi, Karnataka, remained on track for phased commissioning. With the plant’s integration of captive forging and machining operations nearing completion, the company is positioning itself to significantly expand production capacity and penetrate high-margin, defence-oriented components in the quarters ahead.
The robust performance builds on the foundation laid in the first quarter, with consolidated revenue for the first half of FY26 reaching ₹5,327 million, up 33.8 percent compared to the same period last year. Half-year EBITDA grew 43.0 percent to ₹1,551 million, while profit after tax surged 51.3 percent to ₹1,221 million, signalling expanding margins and operating leverage.
How does Balu Forge Industries Limited’s Q2 FY26 earnings performance illustrate sustained growth momentum and expanding operational execution capabilities across its core manufacturing segments?
The quarterly earnings data underscores that Balu Forge Industries Limited continues to sustain high growth levels amidst rising industry demand and internal capacity scale-up. Revenue for the second quarter grew by ₹766 million over Q2 FY25, representing a 34.4 percent year-on-year increase. Sequentially, revenues grew 28.4 percent over Q1 FY26, when the company posted ₹2,332 million in operating income.
EBITDA reached ₹828 million in Q2 FY26, improving from ₹652 million in the corresponding period last year and ₹723 million in the previous quarter. However, the EBITDA margin for Q2 FY26 stood at 27.6 percent, showing a slight decline from 31.0 percent in Q1 FY26 and 29.3 percent in Q2 FY25. This moderation was largely attributed to scale-up related costs and initial commercialisation expenditures at new facilities.
Profit after tax for the quarter stood at ₹650 million, up from ₹480 million in the same quarter of FY25, representing 35.5 percent growth. The PAT margin for the quarter came in at 21.5 percent, only marginally higher than the 21.3 percent recorded in Q2 FY25. Sequentially, PAT rose 21.3 percent from ₹570 million in Q1 FY26, although the margin was lower by 280 basis points due to transitional costs.
Earnings per share for the quarter rose to ₹6.08 from ₹4.55 a year ago. For the first half of FY26, EPS reached ₹10.76, a 40.9 percent increase from ₹7.90 in the corresponding period of FY25. The full-year earnings trajectory remains strong given the commercial ramp expected in the second half.
How is the Hattargi facility contributing to Balu Forge’s capacity transformation?
The most significant operational update in the second quarter was the progress reported at Balu Forge Industries Limited’s greenfield manufacturing plant in Hattargi, Karnataka. The company has described this facility as central to its long-term strategy of integrating forging and precision machining in a single industrial complex. Once fully commissioned, the facility is expected to support a forging capacity of 150,000 tons per year and a machining capacity of 80,000 tons per year.
Major equipment installations, including a 25-ton closed-die forging hammer, an 8,000-ton mechanical press, and fully automated machining lines, are moving through the commissioning phase. These systems are designed to address large-volume, high-complexity production requirements across automotive, industrial, defence, and aerospace sectors.
Executives at Balu Forge Industries Limited indicated that the Hattargi facility will play a pivotal role in driving the company’s ability to meet growing demand from export clients and defence customers alike. The strategic location, combined with backward-integrated capabilities and dedicated lines for high-precision applications, will support stronger unit economics and improve delivery timelines across verticals.
How is Balu Forge Industries Limited progressing in the commercialisation of its defence manufacturing vertical and what does this imply for future growth and order visibility?
Balu Forge Industries Limited has officially entered the commercialisation phase for its defence vertical, with artillery shell manufacturing now underway at scale. A dedicated forging and machining line for Empty Shells is operational and has a stated capacity of 360,000 units per year. The company noted that this product line is part of its long-term strategy to supply components for artillery systems, armoured vehicles, and military-grade engines.
Vendor approvals have already been secured from key Indian defence players, which analysts see as a strong signal of upcoming procurement traction. The company is also exploring product expansion in areas like large-calibre forged housings, combat vehicle drivetrain components, and high-strength forged axles. Defence is expected to evolve into a stable and high-margin revenue stream for Balu Forge Industries Limited, with the ramp-up expected to continue over the next two to three quarters.
Management stated that continued investments into this division will be complemented by customer diversification efforts, particularly in government-linked and export markets. The defence strategy is aligned with India’s broader domestic manufacturing focus under the Atmanirbhar Bharat framework, and Balu Forge’s early-mover advantage in commercial-scale artillery production may position it favourably for future tenders.
What is the current investor sentiment and stock market performance around Balu Forge?
Shares of Balu Forge Industries Limited closed at ₹621.10 on November 14, 2025, marking a 2.33 percent gain over the previous day. The stock has rebounded significantly from its 52-week low of ₹428.40 in March 2025 but remains well below its 52-week high of ₹867.70 recorded in December 2024. This price action reflects both cautious optimism around long-term capacity monetisation and a measured investor response to near-term margin volatility.
The company’s current market capitalisation stands at ₹7,080 crore, with a free float market cap of approximately ₹2,733.89 crore. The stock trades at a price-to-earnings ratio of 30.5, indicating relatively rich valuations, which investors appear to justify based on earnings growth visibility and asset utilisation ramp-up.
Average daily traded volume stood at 4.67 lakh shares, translating to a traded value of ₹28.84 crore. Approximately 40.2 percent of traded volumes were marked for delivery, suggesting a relatively high proportion of investor interest from long-term participants.
Analysts tracking the stock believe that while the Hattargi plant offers strong upside through scale and efficiency, execution timelines and defence order flows will be the key variables determining second-half performance. Margins are expected to remain healthy, though slightly volatile, as operational expenses catch up with capacity rollouts.
What are institutional investors likely to monitor in the second half of FY26 as Balu Forge Industries Limited scales its defence and forging capacity?
With the first two quarters delivering strong year-on-year gains and a clear line of sight to capacity scaling, institutional investors are expected to focus on several leading indicators for the remainder of FY26. These include order book visibility from both defence and industrial clients, updates on commissioning timelines at Hattargi, and the contribution of exports to total revenue.
The company’s efforts to improve product diversification across high-value sectors such as aerospace, marine, and energy are also being closely watched. As international OEMs increasingly look to India for component sourcing, Balu Forge Industries Limited could emerge as a strategic vendor, provided it maintains delivery consistency and cost competitiveness.
Financial health metrics, including working capital efficiency, debt servicing capacity, and cash flow generation, will also be in focus as investors assess the return on capital employed from the large greenfield investments. Analysts expect that by FY27, the current expansion cycle will have a meaningful contribution to both topline and free cash flows.
What are the key takeaways from Balu Forge Industries Limited’s Q2 FY26 earnings and expansion strategy?
- Balu Forge Industries Limited reported ₹2,995 million in Q2 FY26 revenue, a 34.4 percent year-on-year increase, with profit after tax rising 35.5 percent to ₹650 million.
- EBITDA stood at ₹828 million for the quarter, up 27.0 percent year-on-year, though margins slightly contracted due to expansion-related commissioning costs.
- For H1 FY26, the company posted ₹5,327 million in revenue and ₹1,221 million in profit after tax, representing YoY growth of 33.8 percent and 51.3 percent, respectively.
- The greenfield Hattargi facility in Karnataka is progressing on schedule and is expected to boost forging capacity to 150,000 tons and machining capacity to 80,000 tons per year.
- Commercialisation has begun for the company’s defence vertical, with a dedicated artillery shell production line capable of 360,000 units annually now operational.
- Vendor approvals for defence products have been secured from key Indian players, and new offerings across artillery, armoured vehicle, and engine components are under development.
- The stock closed at ₹621.10 on November 14, 2025, up 2.33 percent for the day, with a market capitalisation of ₹7,080 crore and a trailing P/E of 30.5.
- Institutional investors are expected to track defence order inflows, Hattargi utilisation, export revenue mix, and margin trends closely in the second half of FY26.
- Analysts believe FY26 H2 will test the monetisation of capex investments, with a shift from infrastructure execution to operating leverage and customer diversification.
- Balu Forge Industries Limited is positioning itself as a precision manufacturing leader in the Indian defence and industrial ecosystem, supported by strategic investments in integrated capabilities and automation.
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