Balu Forge Q2 Consolidated Net Profit Jumps 18%; Board approves ₹162 crore Warrant Issue to Promoters

Balu Forge Industries Ltd reported a consolidated net profit of ₹76.59 crore for the quarter ended September 30, 2026, up 17.8% from the same quarter last year. Revenue from operations rose 8.3% year-on-year to ₹324.34 crore.

Total income for the quarter grew 9.1% to ₹330.27 crore. Profit before tax rose 13.4% to ₹90.61 crore, and profit growth outpaced revenue growth because of improved margins. Net profit margin on operating revenue widened to about 23.6% from 21.7% a year earlier. Basic earnings per share rose 8.4% to ₹6.59.

The half-year numbers show stronger momentum. Consolidated revenue from operations for April-September 2026 rose 17.3% year-on-year to ₹625.05 crore, while total income grew 18.1% to ₹634.85 crore. Profit before tax for the half year rose 14.3% to ₹171.34 crore, and net profit climbed 16.9% to ₹142.68 crore. Half-year basic EPS stood at ₹12.08, up 12.3%.

On a sequential basis, the second quarter was also stronger than the first. Revenue grew about 7.9% over the June quarter, and net profit rose roughly 15.9% from ₹66.09 crore.

The company's costs rose faster than revenue in several areas. Total expenses for the quarter rose 7.5% to ₹239.65 crore, but the cost of materials consumed climbed 14.5%. Employee benefit expenses jumped 39% and depreciation rose about 66%, reflecting the company's expanded asset base after heavy capital spending. Finance costs rose nearly 35%, in line with higher borrowings. Other expenses were up 15.1%.

The foreign subsidiary, Safa Otomotiz FZE-LLC, was a major contributor to the group's performance, according to figures disclosed in the auditor's report. It reported revenue of ₹128.98 crore and net profit of ₹32.71 crore for the quarter. That is roughly 40% of consolidated revenue and about 43% of consolidated net profit. For the half year, the subsidiary posted revenue of ₹255.78 crore and net profit of ₹61.62 crore.

Standalone performance was also strong. Standalone revenue from operations for the quarter rose 17.1% to ₹195.44 crore, and profit before tax grew 21.5% to ₹61.29 crore. Standalone net profit surged 32.8% to ₹47.26 crore, aided by a lower deferred tax charge. For the half year, standalone revenue rose 16.9% to ₹370.45 crore and net profit grew 22.2% to ₹85.05 crore. Standalone basic EPS for the quarter was ₹3.89, up 24.7%.

Warrant issue to promoters

Alongside the results, the board approved a preferential issue of up to 30 lakh fully convertible warrants to two promoters at ₹540 per warrant, including a premium of ₹530. The issue would raise up to ₹162 crore. The issue price is not below the floor price determined under Chapter V of the SEBI ICDR Regulations.

The proposed allottees are promoters Trimaan Jaspalsingh Chandock and Jaikaran Jaspalsingh Chandock, who would receive 15 lakh warrants each. Trimaan currently holds 25.76 lakh shares (2.12%) and Jaikaran holds 25.10 lakh shares (2.07%). Assuming full allotment and conversion, with no other change in share capital, their holdings would rise to 3.28% and 3.22% respectively.

Each warrant can be converted into one equity share of ₹10 face value, in one or more tranches, within 18 months of allotment. 

The board also approved raising the authorised share capital from ₹125 crore to ₹132 crore. This will be done by creating 70 lakh additional equity shares, taking the total authorised shares from 12.5 crore to 13.2 crore.