SYNOPSIS: A precision engineering company signed a five-year MoU with a NATO-affiliated entity to supply 155 mm and 152 mm artillery shells from April 2026, marking expansion into large-calibre defence consumables manufacturing.
During Thursday’s trading session, shares of a precision engineering company engaged in the manufacturing of forged and machined components hit an upper circuit on the stock exchanges, after signing a Memorandum of Understanding (MoU) for a large-calibre ammunition supply.
With a market cap of Rs. 5,643.2 crores, shares of Balu Forge Industries Limited hit a 10 percent upper circuit at Rs. 490.75 on BSE, compared to its previous closing price of Rs. 446.15. So far in 2026, the stock has delivered negative returns of around 18 percent, but has gained by over 34 percent in one month.
What’s the News:
As per the latest disclosures with the stock exchanges, Balu Forge Industries Limited has entered into an MoU for the supply of empty artillery shells from its greenfield manufacturing facility in Belgaum, Karnataka. This development marks the next milestone in the company’s defence manufacturing journey following its onboarding into the NATO supply chain and the commercialisation of its empty shell production line.
The agreement aligns with Balu Forge’s broader strategy to establish a strong presence in the defence consumables segment, beginning with large-calibre ammunition and gradually expanding into medium- and small-calibre categories. The scope of the MoU covers the full large-calibre ammunition range, starting with 155 mm M107, 152 mm, and 155 mm ERFB/BT variants. Over time, the product basket is expected to extend to 105 mm, 120 mm, and 81 mm variants, among others.
Under the agreement, the company will supply 30,000 units per month of 155 mm M107 shells and 10,000 units per month of 152 mm shells, both in “Ready to Fill” condition, for a period of five years. The pricing has been agreed at $315 per unit for both variants.
The payment structure includes a 20 percent advance payment, with the remaining balance to be settled through an irrevocable Letter of Credit payable within 30 days from invoice issuance. The agreement is legally binding and will remain effective for five years starting 25th February 2026.
Due to the sensitive and strategic nature of the supplies, the MoU has been signed with a NATO-affiliated entity, and the identity of the end user has not been disclosed. Serial production and dispatch are scheduled to commence from April 2026, with a phased ramp-up plan. Initial deliveries will focus on the 155 mm M107 and 152 mm variants, while extended-range 155 mm ERFB BB/BT shells will be incorporated, subject to successful trials and approvals.
Financials & More:
Balu Forge reported a significant growth in revenue from operations, experiencing a year-on-year increase of over 21 percent, from Rs. 256 crores in Q3 FY25 to Rs. 311 crores in Q3 FY26. Likewise, its net profit increased during the same period from Rs. 59 crores to Rs. 71 crores, representing a rise of nearly 20 percent YoY.
The company’s order book remains well diversified across industries. Defence, aerospace and railway projects form the largest share at 40 percent, followed by agriculture at 14 percent and oil & gas at 13 percent. Commercial vehicles contribute 19 percent, while power generation accounts for 5 percent. Heavy engineering and industrial machinery make up the remaining 9 percent of the total order book.
As per the December 2025 shareholding pattern, the ace investor Ashish Kacholia holds a total of 1.63 percent stake in the company under his name.
Balu Forge Industries Limited is a leading Indian precision engineering company delivering forged and machined components across multiple global industries. The company offers a comprehensive product portfolio ranging from 1 kg to 1,500 kg and up to 3 meters in length, supporting diverse applications in automotive, industrial vehicles, earthmoving equipment, wind energy, aerospace, defence, oil and gas, railways, marine, and agriculture.
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