L G Balakrishnan & Bros Announces ₹40 Crore Capacity Expansion at Oragadam Facility.

Coimbatore-based L G Balakrishnan & Bros Ltd (LGB), a leading manufacturer of two-wheeler automotive chains, is set to invest ₹40 crore to expand its manufacturing capacity at its Oragadam factory near Chennai.

The planned expansion will add over 9,500 square meters of manufacturing space to produce sprockets, precision machining components, automotive chains, assembled engines, and aluminium die-castings, as per the company’s submission to the State Environment Ministry.

The Vallam Vadagal facility currently produces fine-blanked components, sprockets, aerospace parts, and other precision components. To date, ₹76.64 crore has been invested in the plant. With the proposed additional outlay of ₹39.78 crore, the total investment at the site will increase to ₹116.42 crore.

In FY24, LGB reported consolidated revenues of ₹2,346 crore, with its transmission business contributing ₹1,851 crore and the remaining from its metal forming segment. Profit after tax (PAT) stood at ₹271 crore. For the first half of FY25, the company recorded revenues of ₹1,232 crore, a 7% growth from ₹1,139 crore in H1 FY24, and a PAT of ₹143 crore, up from ₹131 crore.

The company is also constructing a new factory in Nagpur to manufacture power transmission chains and related products for both automotive and industrial applications.

With a market share exceeding 60% in India’s two-wheeler chain segment, LGB markets its products under the Rolon brand and serves major two-wheeler OEMs. Approximately 30% of its revenues come from the domestic aftermarket, providing a buffer against potential downturns in the two-wheeler industry.

LGB’s operational margins stood at a healthy 16.8% in FY24, with the company maintaining a net debt-negative status and unencumbered cash reserves of ₹632.4 crore as of March 31, 2024, according to ICRA.

The company operates 24 manufacturing facilities across Tamil Nadu, Maharashtra, Karnataka, Rajasthan, and other states, along with one in the US, highlighting its extensive production footprint.

HBL