Ramkrishna Forgings
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Ramkrishna Forgings Limited is positioned for significant growth, driven by management's strategic pivot towards non-automotive sectors and a diversified product mix. The company's optimistic outlook is supported by the Indian government's 'Make in India' initiative, which enhances demand in the railway and automotive sectors. Management aims for a 22-25% CAGR to reach Rs 8,000 crore in revenue by FY29, indicating strong revenue growth potential. However, challenges such as geopolitical supply chain disruptions and energy price volatility remain pertinent. Vista's financial outlook reflects expectations of accelerating revenue growth and improving margins, although the stock trades at a premium valuation, suggesting limited upside potential. The industry context, characterized by improving pricing power and stable demand, further supports Ramkrishna's growth trajectory. Over the next 12-24 months, key opportunities include expanding into lightweight forgings and EV components, while watchpoints include managing external geopolitical risks and maintaining operational efficiency amidst inflationary pressures
Why We Like This Stock
- Management's strategic pivot towards non-automotive sectors and diversification of the product mix enhances long-term growth prospects
- The Indian government's 'Make in India' initiative supports robust demand in key sectors, particularly railways and automotive
- Expected revenue growth of 22-25% CAGR by FY29 indicates strong operational leverage and margin improvement potential
Things To Watch Out For
- Geopolitical supply chain disruptions and energy price volatility pose significant risks to operational stability and margins
- The stock's premium valuation limits upside potential, with a strong sell recommendation reflecting market concerns
- External economic fluctuations and inflationary pressures could impact demand stability and overall profitability
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 3,705 | 4,034 | 4,238 | 4,710 | 5,173 |
| Profit Before Tax (Cr.) | 406 | 140 | 95 | 117 | 126 |
| PBT Margin | 11.0% | 3.5% | 2.2% | 2.5% | 2.4% |
| Net Profit (Cr.) | 292 | 210 | 93 | 88 | 94 |
| Earnings Per Share | 16.1 | 11.6 | 5.1 | 4.8 | 5.2 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
Show Company Profile
Ramkrishna Forgings Limited engages in the manufacture and sale of forged components for automobiles, railway wagons and coaches, and engineering parts in India and internationally. The company's products portfolio includes beam, knuckle, steering arm, tie-rod-arm, sector shaft, front hub, crankshaft, camshaft, connecting rod, piston, pitman arm, BC lever assembly, mounting bracket, yoke, UJ cross, wheel coupling, transmission gear and shaft, crown wheel, pinion, differential case and case cover, differential gear and pinion, spindle, rear axle shaft, spider, tube flange and shaft, tube yoke, input cold forged shaft, and aluminium forgings. It also offers bucket, backhoe bucket, shovel, track line and roller, bucket tooth, pivot pin, prop shaft, and bearing centre products; and wing nut, valve bonet, T-bolt socket joint, and tooth crusher hammer products. In addition, the company provides bogie frame and bolster, screw coupling, hanger, draw gear assembly, anti roll bar assembly, control arm support, center pivot pin, centering disc, traction center, and guide products. Further, it offers tractor-trailer products, such as trailer axle, air and mechanical suspension, landing leg, and bolton and weldable king pin products. The company offers products for various industries and sectors, including automotive, earth moving and mining, farm equipment, power, construction, general engineering, railways, and oil and gas, as well as for original equipment manufacturers. Ramkrishna Forgings Limited was incorporated in 1981 and is headquartered in Kolkata, India.