L.G. Balakrishnan & Bros Limited (**LGB**), established in **1956** with roots tracing back to **1937**, is a premier Indian manufacturer of transmission chains, sprockets, and metal-formed parts. Operating under the flagship brand **'ROLON'**, the company is a dominant player in the automotive and industrial segments, serving major global and domestic **Original Equipment Manufacturers (OEMs)** and a robust aftermarket network. --- ### **Core Business Segments & Product Portfolio** LGB’s operations are vertically integrated and categorized into two primary business segments, supported by a government-certified **R&D centre** and **NABL-certified** laboratory facilities. | Segment | Key Products & Technologies | Applications | |:---|:---|:---| | **Transmission** | Chains (Double Life, Cam, Silent, Industrial), Sprockets (Laser Structured), Tensioners, Belts (**5G Advantage** technology), and Brake Shoes. | Two-wheelers, Passenger Vehicles (PV), and Industrial machinery. | | **Metal Forming** | Fine blanking precision parts, machined components, forged rollers, and wire drawing products. | Internal supply chain, fuel pumps, seat adjusters, and umbrella manufacturing. | #### **Specialized Engineering Capabilities** * **Two-Wheeler Solutions:** High-performance sprocket-chain kits designed for **low initial elongation**, fuel efficiency, and durability using **Chain Pin Nitriding**. * **Passenger & Commercial Vehicles:** Precision components including gear height adjusters, latches, engine timing parts, **VTC 8** covers, and friction spacers. * **Advanced Manufacturing:** Capabilities in **Robotic Welding**, **CNC Hobbing**, **Ultrasonic Cleaning**, and **Gear Grinding**. * **New Verticals:** Entry into **IC Engine Assembly** for export customers and development of specialized parts for the **Electric Vehicle (EV)** segment. --- ### **Manufacturing Footprint & Global Reach** As of **2025**, LGB maintains an extensive operational network designed to minimize logistics costs and maximize market penetration. * **Domestic Infrastructure:** **36** manufacturing plants and **29** offices across **Tamil Nadu, Pondicherry, Maharashtra, Uttarakhand, Karnataka, Haryana, and Rajasthan**. * **International Presence:** **1** manufacturing plant in **Michigan, USA**, with exports reaching approximately **30 countries**. * **Export Contribution:** International sales account for **11.87%** of total turnover, with foreign exchange earnings of **₹243.72 crore** significantly offsetting outgoings. --- ### **Strategic Growth & Expansion Roadmap** LGB is executing an aggressive expansion strategy to diversify its geographic risk and capitalize on emerging automotive trends. #### **1. International Manufacturing Expansion** * **Mexico:** Approved a new facility for transmission products to serve the North American market (July 2025). * **Southeast Asia:** Exploring manufacturing hubs in **Vietnam and Thailand** to capture the ASEAN market. #### **2. Domestic Capacity & Acquisitions** * **Nagpur (MEGA Project):** Construction of a major plant at **Additional Butibori MIDC** for power transmission chains. * **LGB Steel Private Limited:** Acquired **100%** stake (formerly RSAL Steel) via the **CIRP** process for **₹36.37 Crore** in **January 2024**, ensuring backward integration for **CRCA strips**. * **Pondicherry Plant:** Acquired from LGB Forge Limited for **₹15 Crores** in **December 2023**. * **EV Strategic Investment:** Acquired a **14.92%** equity stake in **Greenerg Mobility Solutions** (up to **₹12 Crore** total investment via equity and debentures) to anchor its position in the EV ecosystem. --- ### **Financial Performance & Capital Structure** The company has demonstrated consistent year-on-year growth in both revenue and profitability, backed by a strong credit profile. #### **Consolidated Financial Summary** | Metric | FY 2024-25 | FY 2023-24 | FY 2022-23 | |:---|:---|:---|:---| | **Revenue from Operations** | **₹2,633.52 Cr** | **₹2,395.47 Cr** | **₹2,228.89 Cr** | | **Net Profit (PAT)** | **₹302.09 Cr** | **₹271.50 Cr** | **₹252.33 Cr** | | **Dividend Per Share** | **₹20 (Proposed)** | **₹18** | **₹16** | #### **Capital Raising & Credit Ratings** * **Equity Expansion:** In **September 2024**, the company converted **5,00,000 warrants** into equity at **₹1,292 per share**, raising **₹64.6 Crore** for growth initiatives. Paid-up capital now stands at **3,18,92,416 shares**. * **Credit Ratings (ICRA):** Reaffirmed at **AA (Stable)** for long-term and **A1+** for short-term instruments. --- ### **Sustainability & ESG Integration** LGB is transitioning toward a greener operational model to ensure long-term resilience and regulatory compliance. * **Renewable Energy:** Operates **22 windmills** and solar installations totaling **10.50 MW**. In FY 2024-25, renewable sources provided **12.09%** of total power (**1.31 crore units**). * **Future Targets:** Developing an additional **11.5 MWp** of solar and **7.5 MWp** of Group Captive Power for FY **2025-26**. * **Resource Management:** Implemented **Zero Liquid Discharge (ZLD)**, recycling **100%** of effluent and sewage water. * **Certifications:** All facilities are **ISO 45001** (Safety) and **ISO 14001** (Environment) certified. --- ### **Risk Management & Governance** The company operates under a formal **Enterprise Risk Management** framework to mitigate operational and financial volatility. * **Cyber Security:** Following a **malware incident** in **September 2025**, the company has enhanced its IT containment and notification protocols. * **Financial Hedging:** Uses a centralized treasury for **natural hedging** and **forward contracts** to manage foreign currency exposure. The company maintains **no material floating rate liability**, insulating it from interest rate hikes. * **Operational Safety:** Employs **Hazard Identification and Risk Assessment (HIRA)**, with mock drills every **6 months** and fire drills every **2 months**. * **Supply Chain Governance:** Currently developing a program to audit the **social and environmental practices** of its value chain partners. * **Legal:** Monitoring the final NCLT approval for the **RSAI** takeover and managing geopolitical risks (e.g., crude oil inflation) through proactive pricing and sourcing strategies.