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Ramkrishna Forgings Ltd
NSE: RKFORGE BSE: 532527 INE399G01023 Consumer Discretionary Automobile 🔎 Screen
NIFTY 500 Smallcap 250
₹10,393 Cr
Market Cap
127.0
P/E
4.54
PEG
5.6%
ROCE
2.6%
ROE
0.74
D/E
14.8%
OPM
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
Shareholding
About

Ramkrishna Forgings Ltd is primarily engaged in manufacturing and sale of forged components of automobiles, railway wagons & coaches and engineering parts. It is the 2nd largest forging player in India.

✓ Strengths 1
  • Company's working capital requirements have reduced from 28.6 days to 13.2 days
! Concerns 4
  • Stock is trading at 3.06 times its book value
  • Company has low interest coverage ratio.
  • Tax rate seems low
  • Company has a low return on equity of 9.78% over last 3 years.
Key Ratios Snapshot
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📈 Growth Pattern
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3-Statement Financial Model
Bear / Base / Bull projections · DCF fair value · Reverse-DCF
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Strong quarter with revenue beat and margin expansion, but profitability remains low and debt high quarter Investor Presentation One-Pager? Mar 2026
Revenue
₹1,217 Cr
+28% YoY
EBITDA Margin
17.1%
+670 bps YoY
PAT
₹64 Cr
PBT (PAT not disclosed); Q4 PBT vs ₹30 Cr in Q3 FY26
Key Metric
₹594 Cr
Order wins in Q4, program life 4 years
What Went Right
  • Revenue grew 28% YoY to ₹1,217 Cr, driven by strong domestic demand (up 52% YoY).
  • EBITDA margin expanded to 17.1% from 10.4% YoY on better operating leverage.
  • Order wins of ₹594 Cr in Q4, with 44% from non-auto segments, demonstrating diversification.
  • Railways revenue share rose to 7.5% in FY26 from 4.6% in FY25, now a meaningful contributor.
  • Capacity additions of 43,000 MT forging and 28,000 MT casting in Q4 position for future growth.
What to Watch
  • Consolidated PAT for FY26 collapsed to ₹71.8 Cr from ₹331.6 Cr (continuing ops in FY25); Q4 PAT not disclosed, but thin PBT margin of 5.3% despite high revenue.
  • Net debt increased to ₹2,172 Cr from ₹1,993 Cr, despite ₹202 Cr equity infusion via warrants.
  • Full-year export revenue declined 20% YoY to ₹1,187 Cr from ₹1,482 Cr, impacted by tariffs and geopolitical disruptions.
  • Overall capacity utilisation stuck at 74%; forging press utilisation only 68%, indicating under-absorption.
  • Finance costs surged to ₹210 Cr from ₹166 Cr, consuming 33% of EBITDA and squeezing net profit.
Management Guidance
  • Management expects FY27 to be a strong year with healthy order book providing revenue visibility (order book ramp-up: FY27 ₹1,550 Cr, FY28 ₹2,636 Cr, FY29 ₹2,854 Cr, FY30 ₹2,595 Cr from new orders).
  • Target to reduce Scope 1 and Scope 2 emissions by 50% by 2028.
  • Rail wheel JV commercial operations expected by end of June 2026.
Investor Lens
The thesis remains intact: diversification into railways and non-auto is gaining traction, and the heavy capex cycle is largely complete, setting up for operating leverage. However, near-term profitability is under serious strain — FY26 PAT fell sharply, exports declined 20% YoY, and debt remains high at ₹2,172 Cr. Q4 showed sequential improvement in export volume (+18% QoQ) and PBT turned positive, but capacity utilisation at 74% leaves room. Key watchpoints for next quarter: ramp-up of new forging/casting lines, Mexico facility bulk production (expected May 2026), rail wheel JV hot trials, and any tariff developments. Balance sheet deleveraging over the next 2-3 years is critical for margin recovery.
From investor presentation · AI-generated analysis · Not investment advice
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📊 MIXED 28.5% revenue growth to ₹1,217 Cr
Revenue
Revenue grew 28.5% YoY to ₹1,217 Cr and 10.7% QoQ. This indicates a strong top-line performance. Revenue has shown significant growth compared to the same quarter last year.
Profitability
Net Profit is ₹56 Cr, down 72% YoY, with an EPS of ₹3.08. Despite the decline, the company reported a profit. The significant decline in net profit is a concern.
Margins
OPM is 17%, up from 10% YoY, but down from 15% QoQ. The increase in OPM is a positive sign, but the QoQ decline needs to be watched. The margin trend is mixed.
Balance Sheet
Borrowings are ₹2,449 Cr, with reserves of ₹3,254 Cr. The debt-to-equity ratio is 0.89, indicating a manageable debt level. The company's balance sheet appears stable.
Key Risks
The significant decline in net profit and high debt levels are key risks. The company's ability to maintain profitability and manage debt will be crucial going forward.
Outlook
The company's revenue growth trend is positive, but the decline in net profit is a concern. The company needs to focus on maintaining profitability and managing debt to ensure a stable outlook.
Generated by AI · Mar 2026 results · Not investment advice
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