New press may lift sales by 10-15% in FY17: Ramkrishna Forgings

Ramkrishna Forgings may see its revenues rise by 10-15 percent in the current fiscal owing to the new press it has recently commissioned, says its Chief Financial Officer, Rajesh Mundra. Margins are also gradually expected to rise as the company plans to manufacture complex forged components, he says.The company's revenues fell in the first quarter of current fiscal on both the quarter-on-quarter and year-on-year basis. This was due to a weakness in the export markets for the entire forging industry. Exports account for 35 percent of Ramkrishna's business.Due to this weakness, Mundra says the company has shifted its focus towards its domestic business.Below is the verbatim transcript of Rajesh Mundra's interview to Latha Venkatesh & Sonia Shenoy on CNBC-TV18. Latha: What happened, why is it that on margins, EBITDA, revenue, everywhere there was pressure? A: We had traction in exports last June, in June 2015 and in this quarter the export had fallen. However, you will see the domestic market is looking good for us. In fact they have risen Rs 104 crore to Rs 147 crore in this cycle. However, as you will understand, the domestic cycle, if we are in the industry, domestic cycle is more better for us in the second half than in the first half. That is why we are seeing a more tepid numbers in the first quarter for this financial year because export is down from the last quarter. Sonia: Are you forecasting more pressure in exports for the rest of the year and how much does exports form as an overall part of your business? A: Export will be about 30-35 percent of this financial year. We had about 44 percent last financial year but as we said earlier exports will be little less this financial year and our cycle and our focus will be more towards domestic in this financial year. However, compared to others, since we have given a new project or we have a put up a new project in this financial year, our focus will be more to increase the basket of our products that we are having as of now and secondly to increase customer base. We are working towards that and we have sent the samples to all our customers which we are targeting on. In fact we have also received some orders from customers all over the world from OEMs and we hope that with the increase in the number of customers and the basket of customers, we will be able to overcome the export market crisis that we are facing as of now.