Accumulate Ramkrishna Forgings; target of Rs 650: Dolat Capital Market

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26 Aug, 2025 12:21

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Dolat Capital Market's research report on Ramkrishna Forgings

Ramkrishna Forgings (RMKF) reported a strong set of numbers with Revenue/EBITDA growth of 60/65% YoY led by recovery in both, domestic and export revenue and cost control measures. Domestic business jumped 75% YoY at Rs 2.43bn led by recovery in M&HCV segment, increase in content per vehicle and incremental revenue from LCV division. Export too shot up by 45% to Rs 1.56bn, driven by recovery in the North America Class 8/Class 5 truck segment and incremental revenue from Europe and South America. Rise in steel prices from October’20 onwards to reflect from Q4 which will have some adverse impact on margin partially offset by price increase taken in the beginning of January and the next one is scheduled for April. Metals price rise has not entirely been passed on to the clients. The management stated that Exports are ramping up well led by recovery in class 8 trucks volume. RMKF is focusing on expanding business across different geographies and customers with new capacities in place to cater to Railways, LCV and PV segments.

Outlook

We expect recovery in domestic M&HCV, NA Class 8 trucks and incremental revenue from LCV business to be key growth drivers in the near to medium term. The management stated that gross debt has peaked out at Rs 10.5bn and plans to start reducing debt levels. We recommend Accumulate rating on the stock with a TP of Rs 650 (based on 15x FY23E EPS).

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