Listed on April 29, 2024, Balu Forge soared to a 52-week high of Rs 886.95 on September 24, 2024, buoyed by bullish market sentiment and the Nifty index hitting record highs at the time.
However, Balu Forge’s sharp correction—plunging over 100% to a low of Rs 436.15 on March 17 was equally dramatic, mirroring the broader market sell-off triggered by US President Donald Trump’s tariff threats. The downturn persisted until mid-April, but markets rebounded following the announcement of a three-month tariff pause—and Balu Forge followed suit.
The stock still has to recover nearly 14% to retrace the 2024 closing.
Balu Forge share price outlook
Anuj Gupta, Director at Ya Wealth Global Research expects the stock to remain in a sideways to positive trend, going ahead. He recommends a buy on dips, placing a strong support at Rs 600 levels while the resistance at Rs 780.
Expert Nilesh Jain also does not see a clear trend for the stock on charts. For investors with a short term view, his recommendation is to avoid as he places support at Rs 650 and resistance at 710.
Fundamentally fit
Notwithstanding the long sideways trend, the stock scores on fundamentals.
The auto component maker reported a 123% year-on-year jump in its Q4FY25 net profit at Rs 63 crore versus Rs 28 crore in the year ago period. The company delivered a 67% increase in its revenue from operations at Rs 270 crore versus Rs 161 crore in the corresponding quarter of the previous financial year.
“Leading manufacturer of forged components, Balu Forge, has been displaying a promising price action, making it a lucrative buy opportunity. The stock is currently valued at a 40% premium compared to its sector peers. Hence, a gradual accumulation strategy would prove effective in achieving a better average purchase price,” V.L.A. Ambala, a SEBI-registered Research Analyst Co Founder of Stock Market Today, told ETMarkets.
The company’s financial records also show a strong ROE, he said while highlighting how this stock remains a preferred buy for different classes of investors. “In the recent quarter, holdings by promoters, FIIs, DIIs, and retail investors have increased in the company. However, its proprietary desks have reduced their stakes,” Ambala said.
Those interested can consider entering Balu Forge in the buying range of Rs 610 to Rs 665, he recommended, estimating a price target between Rs 710 and Rs 940 for a holding period of 1-3 months. He sets a strict stop loss of Rs 560.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
