Check Before You Invest : Balu Forge Industries Ltd

BSE: 531112 NSE: BALUFORGE ISIN: INE011E01029

| Sector: Automobiles | Industry: Forgings

Snapshot

Q.1 Which industry/sub-sector does Balu Forge Industries Ltd belong to?

Balu Forge Industries Ltd belongs to the Automobiles sector, operating specifically within the Forgings segment.

Q.2 Is Balu Forge Industries Ltd a good quality company?

Balu Forge Industries Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Balu Forge Industries Ltd undervalued or overvalued?

Balu Forge Industries Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is Balu Forge Industries Ltd a good buy now?

Balu Forge Industries Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Balu Forge Industries Ltd?

Balu Forge Industries Ltd revenue growth is 54.2% for FY-2025, which is below its 5-year CAGR of 395.68%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Return on capital employed is 25.14% for FY-2025, which is in line with its 5-year historical median of 25.14%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.3 Return on Asset of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Return on Asset is 14.83%, which is above its 5-year historical median of 13.16%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Return on equity is 19.79% for FY-2025, which is in line with its 5-year historical median of 19.79%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Cash conversion cycle is 103 days, in line with its 5-year historical median of 103 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.66	0.85
ROE	19.79	19.79
ROCE	25.14	25.14
Cash Conversion Cycle	103 days	103 days

Q.6 Gross Profit margin of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 31.3% for FY-2025, which is above its 5-year median of 16.7%, indicating increasing margins.

Q.7 Operating Profit Margin of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 29.22% for FY-2025, which is above its 5-year median of 17.38% indicating increasing margins.

Q.8 Net Profit Margin of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Net Profit Margin is 22.43% for FY-2025, is above with its 5-year median of 11.89%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	31.3	16.7
Operating Profit Margin	29.22	17.38
Net Profit Margin	22.43	11.89

Q.9 Debt to Equity ratio of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Debt-to-Equity ratio is 0.04, which is lower with the industry average of 0.49, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Balu Forge Industries Ltd?

Balu Forge Industries Ltd Debt to cash flow from operations is 0.24, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Balu Forge Industries Ltd?

Promoters hold 54.39% of the Balu Forge Industries Ltd, with 1.40% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Balu Forge Industries Ltd vs industry peers?

Balu Forge Industries Ltd revenue CAGR is 395.68%, compared to the industry median CAGR of 14.05%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	54.2	14.1
Gross Profit Growth	110.1	25.5
Operating Profit Growth	90.2	18.7
Net Profit Growth	100	26

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.66	0.92
ROE	19.79	15.17
ROCE	25.14	14.66
Cash Conversion Cycle (days)	103.07	112

Valuation & price assessment

Q.1 Stock return of Balu Forge Industries Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 28.5% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	28.5%	19.8%	73%	3.9%

Q.3 Valuation ratios of Balu Forge Industries Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	44.87	49.94	33.04
Price to Book	4.72	6.24	3.77
Price to Sales	10.19	8.12	1.87
EV to EBITDA	30.26	32.37	16.81

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