Dolat Capital Market's research report on Ramkrishna Forgings
Ramkrishna Forgings (RMKF) printed decent set of numbers in Q3FY23 led by sequential growth in Export volume (+8%QoQ). EBITDA margin stood at 22.1% due to better product mix and cost-cutting measures. Although in near term volume growth continues to be decent both domestic and export (strong order back log of class 8 truck), expect high borrowing cost to dent medium term domestic and export CVs demand. Further fall in realization (due to correction in metal prices and change in geography mix) will hit revenue growth. Further margin expected to contract due to change in mix (expect domestic revenue growth would be better than export) and increase in employee cost.
We believe rising proportion of non-Automotive business and Machining are key positives for business. However, uncertain global environment and high capex and high debt are key concerns. We value the stock Rs.272 (based on 16x FY25E). Recommend Reduce.