Ramkrishna Forgings , a leading manufacturer in the forging industry, has set ambitious targets for the second half, projecting a robust 15-20% volume growth. This optimistic outlook is primarily attributed to the company's strategic expansion of its production capacity.

Capacity Expansion and Growth Projections

Managing Director Naresh Jalan revealed that most of the company's ongoing projects are expected to be operational between late September and mid-October. This timely completion of projects is anticipated to significantly boost utilization levels across the company's facilities.

Looking ahead, Ramkrishna Forgings has outlined an impressive growth trajectory:

• Projected growth of Rs 15,000 to Rs 20,000 crore
• Key Growth Driver: Europe identified as a crucial market for export expansion over the next few years
• North American Operations: Expected to maintain stability despite temporary challenges related to tariffs

Recent Financial Performance

While the company's future outlook appears promising, its recent quarterly results present a mixed picture:

The company experienced a modest 6.00% growth in revenue, reaching Rs 1015.26 crore. However, other financial metrics showed declines:

• EBITDA decreased by 12.00% to Rs 147.00 crore
• EBITDA margin compressed from 17.60% to 14.60%
• Net profit saw a significant drop of 78.00%, falling to Rs 12.00 crore from Rs 55.00 crore in the previous year

Market Response

The market's reaction to these developments was slightly negative, with Ramkrishna Forgings' shares closing 0.95% lower at Rs 574.10.

As the company moves forward with its expansion plans and navigates through current challenges, investors and industry observers will be keenly watching how Ramkrishna Forgings translates its growth strategies into financial performance in the coming quarters.

Ramkrishna Forgings , a leading manufacturer in the forging industry, has outlined its ambitious growth strategy, focusing on electric vehicle (EV) applications, margin improvement, and debt reduction. The company is making significant strides in expanding its capabilities and diversifying its product portfolio to capitalize on emerging market trends.

Aluminum Forging Capabilities for EV Market

Ramkrishna Forgings is developing aluminum forging capabilities with a new 3,000 tonne press facility, specifically targeting the burgeoning electric vehicle (EV) market. This strategic move positions the company to meet the growing demand for lightweight components in the automotive sector, particularly for electric vehicles.

Projected Growth and Margin Improvement

The company has set optimistic targets for its future performance:

• Volume Growth: Ramkrishna Forgings expects a robust 15-20% volume growth in the coming years.
• EBITDA Margins:
  • Standalone EBITDA margins are projected to return to 21-22% levels by Q4 FY26 or Q1 FY27.
  • Consolidated margins are expected to reach 20-21%, slightly lower due to the casting business's lower margins.

Debt Reduction and Capital Expenditure Plans

Ramkrishna Forgings has outlined a clear strategy for managing its finances:

• Net Debt Reduction: The company aims to decrease its net debt by Rs 300-400 crores by the end of FY26, bringing it down to Rs 1,400-1,500 crores.
• Capex Plans:
  • FY26 capex is planned at Rs 300-350 crores.
  • An additional Rs 115 crores investment is earmarked for a joint venture project.

US Export Challenges and Mitigation

The company faces tariff challenges in its US export business:

• 25% tariffs on passenger vehicles
• 10% tariffs on commercial vehicles
• Customers are absorbing approximately 50% of the tariff costs, helping to mitigate the impact on Ramkrishna Forgings.

Railway Sector Developments

Ramkrishna Forgings has made significant inroads in the railway sector:

• Approval from Indian Railways: The company received approval for complete assembled undercarriage for passenger vehicles.
• Development Order: A Rs 60 crores order is to be fulfilled by March 2026.

Rail Wheel Joint Venture

The company is investing heavily in a rail wheel joint venture:

• Total Project Cost: Rs 2,000 crores, to be implemented in two phases
• Funding Structure: 70% debt and 30% equity
• Current Investment: Rs 1,274 crores already invested

This comprehensive strategy demonstrates Ramkrishna Forgings' commitment to diversification, technological advancement, and financial prudence. By focusing on high-growth areas like EV components and railway infrastructure, while simultaneously working on margin improvement and debt reduction, the company is positioning itself for sustainable long-term growth in the competitive forging industry.