Balu Forge Industries Limited has achieved another milestone in its defence manufacturing journey by successfully commercialising advanced 155mm Extended Range Full Bore (ERFB) artillery shells.
These include both Base Bleed and Boat Tail variants, which are critical for extended-range artillery systems.
The company has secured an initial pilot order of 10,000 units from a domestic ammunition manufacturer, positioning itself as one of the first private Indian entities to deliver these high-precision variants.
This development follows a strong Q1 FY27 performance and a board-cleared proposal to raise $60 million through Foreign Currency Convertible Bonds. The move underscores an aggressive pivot toward defence manufacturing and highlights the company’s ambition to expand its advanced product portfolio.
The order validates Balu Forge’s state-of-the-art forging and machining capabilities at its Belgaum facility, which has been converted to military-grade specifications with robotics-enabled automation.
The company has been scaling its ‘Ready To Fill’ high-precision defence ammunition shell manufacturing, marking a significant shift from its traditional heavy forging base.
Following the June 2026 domestic contract for 30,000 units of 152mm artillery shells, Balu Forge has now added the 155mm ERFB shells to its portfolio, strengthening its role in India’s defence indigenisation program. The automated Belgaum facility reduces unit manufacturing costs and enhances production speeds, making the company competitive in bulk global supply chains.
This commercialisation creates a clear multi-month revenue runway and helps offset cyclicality in its core auto-forging segments. While the company experienced margin pressure in Q1 FY27, scaling high-margin defence contracts is expected to provide a cushion in subsequent quarters.
The successful execution of the pilot order and the commencement of recurring monthly deliveries will be critical trigger factors for the company’s defence trajectory.
The Indian defence sector is undergoing rapid expansion under the Aatmanirbhar Bharat mandate. Indigenous artillery systems such as the Dhanush rely heavily on extended-range 155mm ammunition.
By securing this domestic supply contract, Balu Forge is well positioned to meet recurring high-volume requirements as the government progressively restricts defence imports. This creates a substantial opportunity for private-sector manufacturers to establish themselves as reliable suppliers.
Key risks remain in execution and scaling, particularly with the automated Belgaum manufacturing lines. Raw material cost volatility linked to London Metal Exchange indices and working capital management challenges, with working-capital days rising to 140 in FY26, also need close monitoring.
Nonetheless, the company’s entry into the 155mm ERFB calibre marks a watershed moment, validating its technological capabilities and establishing a recurring revenue pipeline in the domestic defence industry.
This achievement reflects Balu Forge’s strategic vision of moving deeper into high-margin defence consumables, leveraging its advanced infrastructure, and aligning with India’s broader defence modernisation goals.
It signals a decisive step toward sovereign capabilities in ammunition production and reinforces India’s ambition to become a global hub for defence manufacturing.
Agencies
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