Synopsis:
This auto ancillary stock rallied 16% after posting strong Q2 numbers, driven by a sharp 40% QoQ jump in profit. The surge reflects improved operating traction, demand recovery and stronger margin delivery in the quarter.
This company is a major manufacturer of chains, sprockets and metal-formed parts for automotive applications, is now in the focus after its board reported strong Q2 results with 40% profit growth in QoQ.
With market capitalization of Rs. 5,166 cr, the shares of L G Balakrishnan Ltd are currently trading at Rs. 1,627 per share, jumping 16% in today’s market session making a high of Rs. 1,650, from its previous close of Rs. 1,417.90 per share. Further, the stock is trading at an all-time high.
QoQ performance
L G Balakrishnan posted higher performance across all major metrics. Sales improved by 20% from Rs. 657 crore in Q1FY26 to Rs. 787 crore in Q2FY26, EBITDA rose 41% from Rs. 97.1 crore to Rs. 137 crore, and Net Profit increased by 40% from Rs. 67.0 crore to Rs. 93.6 crore. EPS also moved up sharply QoQ from Rs. 21.00 to Rs. 29.35.
YoY performance
The company has delivered double digit growth with Sales up 19% to Rs. 787 crore from Rs. 661 crore in Q2FY25, EBITDA up 24% to Rs. 137 crore and Net Profit up 24% to Rs. 93.6 crore from Rs. 77.6 crore over the same period, while EPS is higher by 21% YoY from Rs. 24.31 to Rs. 29.35.
The company derives the majority revenue from its Transmission segment (79%), which includes chains, sprockets, tensioners, belts and brake shoes, while Metal Forming contributes 21% with precision fine blanking and machined components. Geographically, business is largely India-led with 83% domestic contribution and 17% from overseas.
About the company
L G Balakrishnan & Bros Ltd is one of India’s leading auto component manufacturers, primarily catering to 2W and 3W OEMs, especially in transmission and driveline systems. The company is a key supplier of chains, sprockets, precision forged & metal formed parts to major auto players, and also has presence in fine blanking and industrial chains.
The company delivers efficient capital returns with an ROCE of 19.9% and an ROE of 16.1%, indicating strong profitability on both capital employed and shareholder equity. It also maintains a healthy dividend payout ratio of around 20.6%, reflecting balanced capital allocation and consistent shareholder reward discipline.
As of Q2 FY26, promoter shareholding stands at 34.82%. FII holding is at 5.84%, down from 5.96% in the previous quarter. DII holding is at 13.47%, compared to 13.74% in Q1 FY26. Public shareholders collectively hold 45.86% of the company.
Written by Manideep Appana
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