Balu Forge Industries shares staged a strong recovery on Tuesday, surging as much as 13% intraday after the company provided clarification regarding the conclusion of a recent Income Tax Department search operation. The sharp rebound came as a relief to investors following a difficult period that saw the stock decline nearly 27% over the previous six sessions.

Company Clarification Lifts Investor Sentiment

In an exchange filing, Balu Forge Industries addressed investor concerns by confirming that the Income Tax Department's search operation has been concluded. The company emphasized several key points that helped restore market confidence:

The clarification effectively addressed the uncertainty that had been weighing on the stock price and contributed to the recent sell-off.

Ashish Kacholia's Stake Adds Investor Interest

The recovery gains additional significance given the involvement of prominent investor Ashish Kacholia, who maintains a notable position in the company. According to the most recent shareholding pattern, Kacholia's investment details are:

Kacholia's presence as a stakeholder has historically attracted attention from retail and institutional investors who closely follow his investment moves.

Technical Recovery from Oversold Levels

The stock's rebound aligns with technical indicators that had been signaling oversold conditions. The Relative Strength Index (RSI) had slipped below 30, a level often interpreted by traders as indicating potential for a technical bounce. Market participants had been watching for signs of stabilization after the sharp decline.

As of 12.13 pm on Tuesday, Balu Forge shares were trading 11.70% higher at ₹492.95 on the BSE, maintaining most of the intraday gains.

Longer-term Performance Challenges

Despite Tuesday's recovery, the stock continues to face headwinds over longer timeframes. The company's share price performance across various periods reflects sustained pressure:

These figures indicate that while Tuesday's rally provides short-term relief, the stock has been under consistent selling pressure across multiple timeframes, suggesting broader challenges beyond the recent tax search concerns.

Market Outlook

With the uncertainty surrounding the Income Tax Department search now resolved, market participants will likely monitor whether the current uptrend can sustain. The removal of this overhang eliminates a key concern that had been pressuring the stock, potentially allowing investors to focus on the company's fundamental business performance and operational metrics going forward.

Balu Forge Industries witnessed a significant surge of 13% today, reaching a day's high of ₹498.95 per share, up from the previous day's closing price of ₹441.30. The rally came after the company announced the conclusion of an Income Tax Department search with no adverse findings, boosting investor confidence in the precision engineering company.

Income Tax Search Concludes Successfully

Through a stock exchange filing, Balu Forge Industries announced that the Income Tax Department had conducted searches at several of their offices and factories starting January 7, 2026. The search process concluded on January 13, 2026, with favorable outcomes for the company.

The company emphasized that promoters and senior management provided full cooperation throughout the process, supplying all requested documents and responses to officials. Production remained uninterrupted, and the company's financial position was not affected by the search operations.

Strong Market Performance and Investor Interest

With a market capitalization of ₹5,645 crores, Balu Forge Industries has demonstrated impressive long-term performance. Over the past five years, the stock has delivered robust returns of 280%, significantly outperforming the NIFTY 50's return of 79% during the same period.

Notably, ace investor Ashish Kacholia, along with his investment firm Bengal Finance and Investment Pvt Ltd, holds a total stake of 2.87% in the company as per the September 2025 shareholding pattern.

Robust Financial Performance in Q2 FY26

The company's recent financial results demonstrate strong operational performance across key metrics:

Diversified Revenue Streams

Balu Forge Industries maintains a well-diversified revenue portfolio across multiple sectors in H1 FY26:

• Agriculture sector: 38% of total sales
• Commercial vehicles: 19% of sales
• Heavy engineering & industrial machinery: 18% of sales
• Defence: 10% of sales
• Power generation: 10% of sales
• Oil & gas: 5% of sales

Company Profile and Product Range

Balu Forge Industries Limited operates as a leading Indian precision engineering company, specializing in forged and machined components for global clients. The company's impressive product range spans components weighing from 1 kg to 1,500 kg, with lengths reaching up to 3 meters. Their components serve diverse applications including automotive, commercial vehicles, earthmoving equipment, wind turbines, aircraft, defence systems, oil and gas installations, railways, shipping, and agricultural machinery.