LGB Forge Limited is a specialized Indian manufacturer of **forged and machined components**, operating as a Tier-II supplier to the automotive, electrical, transmission, and industrial sectors. As a member of the Coimbatore-based **LGB Group**, the company leverages a strategic relationship with its promoter entity, **L.G. Balakrishnan & Bros Limited**, for financial support, corporate guarantees, and operational synergies. The company focuses on high-precision **hot, warm, and cold forged** parts using **stainless, alloy, and carbon steel**. --- ### **Manufacturing Infrastructure & Capacity Expansion** LGB Forge operates a fully integrated production lifecycle, encompassing cutting, forging, heat treatment, machining, finishing, and surface treatment. The company is currently undergoing a significant geographic and operational shift to modernize its footprint. | Facility Type | Location | Annual Capacity / Status | | :--- | :--- | :--- | | **Cold Forging Unit** | Kottaipalayam, Coimbatore | **0.98 crore** components | | **Hot Forging Unit** | Metagalli, Mysore | **0.44 crore** components | | **New Hot Forging Plant** | Kinathukadavu, Coimbatore | Commenced **January 2025** | | **New Manufacturing Plant** | Kondampatti, Coimbatore | Approved **Dec 2024**; expansion of existing lines | | **Chennai Facility** | Oragadam, Kancheepuram | Construction started; Ops expected **mid-2026** | | **Leased Operations** | Coimbatore | Recently leased to meet immediate demand | | **Machining Unit** | Pondicherry | **Sold** via slump sale (April 2024) | --- ### **Strategic Pivot: Asset Monetization & Portfolio Optimization** The company is executing a "leaner" business model by divesting non-core assets to improve liquidity and focusing on high-utilization facilities. * **Pondicherry Divestment:** Effective **April 1, 2024**, the company sold its Pondicherry undertaking to **L.G. Balakrishnan & Bros Limited** for **₹15 crore**. This move resulted in an exceptional profit of **₹2.15 crore** in **Q1 FY2025**, though it removed a division that contributed **₹19.33 crore** to FY24 revenue. * **Real Estate Monetization:** In **March 2026**, the Board approved the sale of **8.04 acres** of land in **Kallapalayam, Coimbatore**, to the **LGB Educational Foundation** (a promoter group trust) for a minimum value of **₹12 crore**. * **Market Positioning:** The company differentiates itself by specializing in **custom-made, small-quantity orders** with short lead times, allowing clients to maintain low inventory levels. * **Revenue Mix:** Approximately **85%** of revenue is domestic, with **15%** derived from exports to Passenger Vehicle (PV), Light Commercial Vehicle (LCV), and tractor segments. --- ### **Financial Performance & Debt Profile** LGB Forge has faced recent margin pressure due to structural costs and discontinued operations, leading to a focus on debt restructuring and credit stability. **Key Financial Metrics** | Metric (₹ in Crore) | FY 2023-24 | FY 2022-23 | % Change | | :--- | :---: | :---: | :---: | | **Total Revenue** | **109.41** | **117.60** | **(6.96%)** | | **Net Profit / (Loss)** | **(9.87)** | **(9.30)** | **-** | | **Total Equity** | **20.17** | **30.17** | **(33.15%)** | | **Net Debt** | **29.05** | **26.08** | **+11.39%** | | **Gearing Ratio** | **144.06%** | **86.44%** | **+57.62 bps** | **Credit Ratings & Borrowing (as of late 2025)** * **Ratings:** **CRISIL BBB-/Stable** (Long-term) and **CRISIL A3** (Short-term). The company migrated from **ICRA** in **February 2025**. * **Total Rated Bank Facilities:** **₹48 Crores**. * **Debt Composition:** Includes secured loans from **Axis Bank**, **ICICI Bank**, **IDBI Bank**, and **Tata Capital**. * **Promoter Support:** A **₹2.00 Crore** term loan was provided by Managing Director **Smt. Rajsri Vijayakumar** at **8% interest**. Major bank loans are secured by a **Corporate Guarantee** from **L.G. Balakrishnan & Bros Limited**. --- ### **Operational Modernization & Governance** Management is prioritizing the replacement of legacy infrastructure and strengthening the leadership team to navigate industrial shifts. * **Leadership Continuity:** **Smt. Rajsri Vijayakumar** (Managing Director) and **Sri. A. Sampath Kumar** (Whole Time Director) were both re-appointed for 3-year terms effective **February 2026**. **Sri. Venkatesan N** was appointed **CFO** in **March 2026**. * **Efficiency Initiatives:** Focus on **Value Engineering**, preventive maintenance, and IT infrastructure upgrades to enhance safety and monitoring. * **Listing Status:** The company **voluntarily delisted** from the **National Stock Exchange (NSE)** effective **August 6, 2024**, to streamline regulatory compliance. It remains listed on the **BSE**. * **Related Party Thresholds:** The company maintains an agreement with **L.G. Balakrishnan & Bros Limited** for goods/services with a transaction limit of **₹60 crore** for the current period. --- ### **Risk Factors & Sensitivity Analysis** LGB Forge operates in a high-intensity segment sensitive to macroeconomic and technological shifts. * **Interest Rate Risk:** With a high proportion of floating-rate debt, a **100 basis point** shift in rates impacts annual profits by approximately **₹21.4 Lakhs**. * **Labor & Compliance:** * A shortage of skilled labor remains a persistent threat. * The **New Labour Codes** (Nov 2025) caused a one-time hit of **₹64.80 Lakhs** for benefit provisions. * Historical labor instability included a strike notice at the **Mysore Plant** in **March 2024**, which has since been resolved. * **Energy & Input Costs:** High energy consumption and volatile steel/iron prices significantly impact margins. These costs are often difficult to pass on to customers immediately. * **Technological Disruption:** The industry-wide transition toward **Electric Vehicles (EVs)** poses a long-term risk to traditional forging components designed for **Internal Combustion Engines (ICE)**. * **External Volatility:** Geopolitical tensions in Europe and Asia have led to high freight prices and volatile export forecasts. The company manages currency risk through **natural hedging** and forward contracts.