Ramkrishna Forgings Q3FY25 results: Strong export growth and strategic expansion

Ramkrishna Forgings Limited, a prominent global supplier of rolled, forged, and machined products, reported robust earnings for the third quarter of FY25. Despite challenges in the domestic market, the company demonstrated resilience through its diversified operations and strong export market growth.

For the quarter ending December 31, 2024, the company recorded a 5.5% year-on-year (YoY) increase in revenue, reaching ₹953 crores, compared to ₹903 crores in Q3FY24. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose by 3.8% YoY, standing at ₹215 crores, while the Profit After Tax (PAT) surged by 21% YoY, touching ₹100 crores.

The company’s performance over the first nine months of FY25 further underscored its growth trajectory, with revenue reaching ₹2,774 crores, a 6.5% YoY increase, and PAT climbing to ₹355 crores, bolstered by ₹88 crores in exceptional gains from the sale of a subsidiary.

What Contributed to Ramkrishna Forgings’ Growth?

The company’s export market played a pivotal role in driving its Q3FY25 performance. Export sales volumes rose by 12.2% YoY to 14,951 tonnes, contributing to a 9.8% increase in revenue, which totaled ₹373.88 crores. This success was attributed to increased demand for forged products across international markets and the company’s strategic expansion efforts.

Domestically, while commercial vehicle (CV) volumes declined by 4%, Ramkrishna Forgings managed to grow sales volumes by 7.02% YoY, achieving ₹570.84 crores in revenue for the quarter. The company credited its ability to secure new orders and diversify its product offerings for offsetting domestic market challenges.

What Are Ramkrishna Forgings’ Strategic Initiatives for Long-Term Growth?

Ramkrishna Forgings has implemented a multi-pronged strategy to sustain and enhance its market position:

• Capacity Expansion: The company has expanded its production capabilities by commissioning new cold and aluminum forging lines, positioning itself to meet rising demand from the electric vehicle (EV) and hybrid vehicle sectors.
• Market Diversification: Entry into previously untapped segments like two-wheelers and passenger vehicles is expected to open new revenue streams.
• Order Book Growth: The company secured ₹697 crores in orders from non-automotive sectors, including railways, which will be executed over four years.
• Focus on Value Addition: Ramkrishna Forgings is leveraging automation and advanced technologies to enhance product value and operational efficiency.

What Do Experts Say About Ramkrishna Forgings’ Prospects?

Naresh Jalan, Managing Director of Ramkrishna Forgings, expressed optimism about the company’s future. Jalan noted, “We are excited about the growth potential stemming from new products, customers, and verticals. Our foray into aluminum forging aligns with emerging opportunities in the EV and hybrid vehicle sectors.”

Jalan also highlighted the company’s emphasis on streamlining subsidiaries to strengthen its financial framework and improve shareholder value. This strategy, combined with a balanced approach to risk management, positions Ramkrishna Forgings for sustained growth in the coming years.

What Sets Ramkrishna Forgings Apart in the Forged Products Industry?

Founded in 1981, Ramkrishna Forgings has evolved into a key supplier of closed die forgings, serving industries like automotive, railways, oil and gas, and construction. Its global footprint includes manufacturing facilities in Jamshedpur and offices in major markets such as the USA, Mexico, Turkey, and Sweden.

The company’s reputation for quality and innovation is reflected in its certifications, including TS 16949, OHSAS 18001, and ISO 14001. Ramkrishna Forgings is a preferred supplier to top OEMs like Tata Motors, Ashok Leyland, Daimler, and international players such as Volvo and Ford Otosan.

How Does Ramkrishna Forgings Plan to Address Market Trends?

Ramkrishna Forgings is actively aligning its operations with industry trends:

• EV and Hybrid Vehicles: The company’s entry into aluminum forging supports the growing shift towards sustainable transportation solutions.
• Increased Automation: Investments in automated production lines aim to enhance efficiency and reduce costs.
• Global Expansion: Strengthening its export market presence remains a priority, as evidenced by its growing international sales volumes.