Balu Forge Q2: Consol PAT +18% YoY to ₹76.6 Cr, Margins Expand as Revenue Growth Cools

Balu Forge's consolidated PAT rose 17.8% YoY to ₹76.59 Cr (from ₹65.04 Cr) and 15.9% QoQ (from ₹66.09 Cr), on revenue of ₹324.34 Cr, up 8.3% YoY and 7.9% QoQ. The print beat our pre-result range on profit (we expected PAT ₹68-72 Cr) and landed within band on revenue (we expected ₹310-330 Cr); no formal Street consensus could be located for this specific quarter via web search — coverage is thin (5-7 analysts per our pre-result preview) and no Q2-specific preview turned up — so the comparison here is against our own expectation band rather than a published consensus number. Consolidated EPS was ₹6.59 versus ₹6.08 a year ago and ₹5.49 in Q1 FY27. Margins expanded on both measures: net margin (PAT/total income) rose to 23.2% from 21.5% YoY (21.7% QoQ), and operating margin (revenue less materials, employee and other opex, excluding finance cost and depreciation) rose to 28.9% of revenue from about 27.7% YoY (28.2% QoQ) — resolving the pre-result watch item on margin sustainability in the company's favour. The group-level 8.3% YoY revenue growth is a sharp deceleration from the ~29% YoY surge flagged for Q1 FY27, but this is a consolidation effect rather than core-business weakness: standalone (India) revenue grew 14.8% YoY to ₹195.44 Cr and standalone PAT grew 32.8% YoY to ₹47.26 Cr, while Safa Otomotiz FZE-LLC contributed ₹128.98 Cr revenue and ₹32.71 Cr PAT this quarter — almost unchanged from roughly ₹129.3 Cr a year ago. There were no exceptional items in either base this quarter or last year, so both YoY comparisons are on a clean, like-for-like basis. The same board meeting approved a ₹162 Cr preferential allotment of 30 lakh warrants to promoters Trimaan and Jaikaran Chandock at ₹540/warrant (a premium issue priced above the ICDR floor), alongside raising authorised share capital from ₹125 Cr to ₹132 Cr — both subject to shareholder approval at an EOGM called for December 12, 2026. This follows the quarter's business update on new defence-order execution and global client wins (November 2, 2026) noted in our event records. Management has no formal guidance or concall commentary on record for this quarter, and no press release was available to cross-check the company's own framing of the print — both are noted gaps rather than silent omissions. Of the three watch items flagged in our pre-result preview, margin sustainability resolved positively (expansion, not compression) and the fundraise materialised as a ₹162 Cr promoter warrant issue now awaiting EOGM approval; order backlog/execution pace was not quantified in this filing and remains unresolved going into Q3.