During Monday’s trading session, the shares of a major manufacturer of chains, sprockets & metal formed parts for automotive applications surged nearly 3.7 percent to Rs. 1,241.15 on BSE, after announcing capacity expansion plans near Chennai, with an investment of Rs. 50 crores.
With a market cap of Rs. 3,887 crores, at 01:11 p.m., the shares of LG Balakrishnan & Bros Limited were trading in the green at Rs. 1,218.8, up by nearly 1.8 percent, as against its previous closing price of Rs. 1,197.15.
What’s the news:
LG Balakrishnan & Bros Limited has notified the stock exchanges that it is currently investigating and securing environmental clearance to expand its production capacity at the Vallam Vadagal Plant in Oragadam, near Chennai. The company has submitted the necessary application for approval from the State Environment Ministry.
The required investment for this expansion is estimated at around Rs. 50 crores, which will be funded through the company’s internal accruals. This investment aims to support the company’s future growth and meet the increasing demand from its customers.
Financials:
LG Balakrishnan reported a marginal growth in revenue from operations, experiencing a year-on-year increase of nearly 10.2 percent, rising from Rs. 600 crores in Q2 FY24 to Rs. 661 crores in Q2 FY25.
Similarly, during the same period, the company’s net profit increased from Rs. 75 crores to Rs. 78 crores, representing a rise of around 4 percent YoY.
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Key Financial Ratios:
In terms of key financial metrics, LG Balakrishnan has a Return on Equity (RoE) of 17.8 percent and a return on capital employed (RoCE) of 22.8 percent. Additionally, the company’s debt-to-equity ratio stands at 0.05.
Stock Performance:
The stock has delivered positive returns of nearly 7.8 percent in one year, but around 3.2 percent of negative returns in the last six months. So far in 2024, the shares of LG Balakrishnan have given negative returns of about 2.2 percent.
About the company:
Founded in 1937, L.G. Balakrishnan & Bros Limited is a major manufacturer of chains, sprockets and metal-formed parts for automotive applications. Its products are marketed under the “Rolon” brand.
The company’s business segments include transmission and metal forming, while its transmission products include chains, sprockets, tensioners, belts and brake shoe.
L.G. Balakrishnan also offers metal forming products consisting of fine blanking for precision sheet metal parts, machined components and wire drawing products for internal use as well as for other chain manufacturing plants, spring steel suppliers and umbrella manufacturers.
Written by Shivani Singh
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