Ramkrishna Forgings Q2 Results Review


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Reliance Securities Report

Ramkrishna Forgings Ltd. delivered a strong performance in Q2 FY23 beating our estimates across the parameters. Revenue grew by 32% YoY (up 17% QoQ) to Rs 7.6 billion (versus our estimate of Rs 6.6 billion), on the back of average selling price growth of 16% YoY (up 11% QoQ) and volume growth of 14% YoY (up 6% QoQ).

Ebitda increased by 22% YoY (up 18% QoQ) to Rs 1.7 billion (surpassing our estimate by 20%), while Ebitda margin contracted by 174 bps YoY (up 22 bps QoQ) to 22.3% (75 bps above our estimate of 21.6%) due to better volumes and realisation in export business.

Raw material/sales grew by 314 bps YoY (up 323 bps QoQ).

Ramkrishna Forging recorded a profit after tax of Rs 639 million (up 28% YoY/ up 35% QoQ), 31% above our estimate of Rs 488 million. We expect a commercial vehicle upcycle to continue over the next one-two years in domestic market and improvement in global CV industry with likely ease on semiconductor supply.

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