Shares of Ramkrishna Forgings experienced a sharp decline of up to 10% following the company's disclosure of inventory discrepancies discovered during its annual verification process. The revelation has sent shockwaves through the market, raising concerns about the company's financial health and operational integrity.

Inventory Discrepancies Uncovered

The auto components manufacturer reported that it had identified inconsistencies in its inventory during the annual verification procedure. While the full extent of the discrepancies is yet to be determined, the company has provided an initial estimate of the potential impact.

Estimated Financial Impact

Ramkrishna Forgings has preliminarily assessed that the inventory discrepancies could affect its net worth by approximately 4-5%. This significant impact has understandably rattled investors, leading to the sharp sell-off in the company's shares.

Investigation Underway

In response to this critical issue, the company has taken swift action by appointing an external agency to conduct a thorough investigation into the matter. This move demonstrates the company's commitment to transparency and its determination to uncover the root cause of the discrepancies.

Promoters' Commitment

In an effort to reassure stakeholders, the promoters of Ramkrishna Forgings have stepped forward with a strong commitment. They have pledged to protect the interests of all stakeholders and have expressed their willingness to fund any potential adverse impacts arising from this situation. This proactive stance by the promoters may help in mitigating some of the concerns surrounding the company's financial stability.

Market Reaction

The stock market's reaction to this news has been decidedly negative, with Ramkrishna Forgings' shares experiencing a significant drop of up to 10%. This sharp decline reflects the market's immediate concern over the company's financial reporting and inventory management practices.

Looking Ahead

As the investigation progresses, stakeholders will be keenly awaiting further updates from Ramkrishna Forgings. The outcome of the external agency's investigation and any subsequent corrective measures taken by the company will be crucial in determining the long-term impact on its financial standing and market perception.

The discovery of these inventory discrepancies serves as a reminder of the importance of robust internal controls and accurate financial reporting in maintaining investor confidence. As the situation unfolds, it will be essential for Ramkrishna Forgings to address these issues transparently and implement measures to prevent such occurrences in the future.

Ramkrishna Forgings Limited , a leading manufacturer in the forging industry, has announced a significant expansion of its production capacity. The company has successfully initiated commercial production of new upsetters, marking a substantial increase in its annual manufacturing capabilities.

Capacity Expansion Details

Ramkrishna Forgings has commenced commercial production of two new upsetters:

1. NATIONAL 5" UPSETTER
2. DEFRIS 2½" UPSETTER

These new additions are located at the company's facility in Plot No. 1988, Mouza Dugni, PO Kolabira, Dist. Saraikella, Kharswan. The commercial production began on March 27, 2025, as per the company's official announcement.

Production Capacity Boost

The installation of these new upsetters has resulted in a significant enhancement of Ramkrishna Forgings' production capacity:

• Increase in annual capacity: 14,250 Metric Tonnes
• Total investment: Rs 40.85 crore

Updated Production Capacity

Following this expansion, Ramkrishna Forgings' total production capacity now stands at:

Financial Aspects

The company has financed this expansion through a mix of equity and debt. This strategic investment aligns with Ramkrishna Forgings' capital expenditure plan and is aimed at meeting the growing demand from its customer base.

Market Position

Prior to this expansion, Ramkrishna Forgings reported a capacity utilization of 87.22% as of December 31, 2024. This high utilization rate underscores the company's strong market position and the need for capacity expansion to meet customer demands.

Management Comment

Rajesh Mundhra, Company Secretary & Compliance Officer of Ramkrishna Forgings, stated, "The Upsetters have been added to cater to the additional demand from the Company's customers."

This capacity expansion reinforces Ramkrishna Forgings' commitment to growth and its ability to meet increasing market demands in the forging industry.