Buy Ramkrishna Forgings; target of Rs 1419: Khambatta Securities
Khambatta Securities is bullish on Ramkrishna Forgings has recommended buy rating on the stock with a target price of Rs 1419 in its research report dated October 18, 2021.
October 25, 2021 / 11:49 AM IST
Khambatta Securities' research report on Ramkrishna Forgings
Ramkrishna Forgings Ltd (RKF) has reported strong set of numbers for the quarter with a top-line growth of 130% y-o-y. The Operating Revenue stood at ₹ 57,882 lakhs for the 2Q FY22 as compared to ₹25,202 in the same quarter last year. The EBITDA has seen a 188% jump on a y-o-y basis at ₹13,107 lakh for quarter ended September 2021. Sequentially the Operating Revenue and EBITDA have seen a growth of 37% each signalling relatively stable operating costs for the company. The EBITDA Margins have improved by 457 bps y-o-y and a marginal decline of 10 bps Q-o-Q. The Net Profit has witnessed a significant growth in the quarter. The PAT stood at ₹4,406 lakhs and ₹145 lakhs for 2Q FY22 and 2QFY21 respectively. The PAT margins jumped by 700 bps to 7.6% during the 3 months ended September 21. The company has achieved an Export turnover of ₹ 28,673 lakh in 2Q FY22 as compared to ₹11,390 lakh in 2Q FY21 registering a growth of ~152%.
Assigning a target multiple of 16.0x FY24E EPS, our valuation generates a price target of ₹ 1,419, informing a BUY rating with an upside potential of 18% from the current levels.
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