Incorporated in 1981 by Mr. M.P. Jalan with a vision of creating a world class auto component manufacturing facility. Having technical capabilities to manufacture high end forge and machine components, supplying products to CV, Railways, and industrial markets, Ramkrishna Forgings Ltd is one of the leading players in Indian forging Industry.

Almost 85% of the total components to manufacture a truck are produced by the company. The company has strong operational results with a consistent track record of profitability and growth.

Products Range

Rolled products, Front Axle Beam, Crankshaft & Knuckle, Machined products, Forged products. The products find its usage in automotive industries, Earth Moving & Mining industries, Farm Equipments, Railways, Steel Plants, Oil Exploration, Wind Energy and General Engineering.

Market Opportunities

Make in India:

• ‘Make in India’ campaign has positioned India as a global manufacturing hub
• Easier tax structures and better approval structures will help in boosting manufacturing

International Opportunity

• Recognition of Indian Forging Industry due to its technical capabilities and cost advantage over others.
• Emphasis on emission norms with Euro 6 implementation.
• Boost commercial vehicle demand may see arise due to Global economic recovery and reduced fuel prices world over.

Domestic Demand Growth:

• Expanding city perimeters which will lead to increase in demand for mass transportation.
• Revival of passenger vehicle market and increase in industrial production.
• Massive growth in Indian logistics sector.
• Revival of mining sector in specific states like Orissa, Karnataka would benefit CV industry which is showing growth after slowdown.
• Lowering of interest rates.
• Stricter anti-overloading and ABS braking norms to contribute to demand.
• Consolidation with few large players dominating the market in forging industry.

Clients: Indian as well as Overseas

• Automotive - Tata, Ashok Leyland, Eicher, Daimler, Meritor, Axle Tech, DANA, Sisamex, Volvo
• Earth Moving & Mining – Tata Hitachi, BEML, BERCO
• Farm Equipment – TAFE, Engrecon, HEMA Endustri A.S.
• Bearing – Timken, NBC Bearing
• General Engineering – RENK, BHEL, Leitner Poma, Prinoth, Ellwood National Crankshaft Co.
• Steel Plants – SAIL
• Railways – Indian Railways, Electro Motive, Cardwell Westinghouse

Investment Rationale:

• Sustained Growth with improving top-line, EBITDA and bottom-line
• Global Diversification Contribution of export to increase going forward which have higher margins.
• Product & Capacity Expansion Capacity expansion in forging as well as machining and commissioning of state of art 12,500T Press.
• Manufacturing Capability & Economies of Scale
  • 5 manufacturing set ups with 45,000T Hammers and Upsetters, 24000T ringrolling pressline and 4 presslines of totaling to 80,000T capacity (3,150T, 5,400T, 6,300T and 12,500T.
  • Best in class technology for precision and industry leading cycle time.
• Rich Product Portfolio & Proximity to Raw Material Source
  • Rich product portfolio comprising of axle components, transmissions components crown wheels etc.
  • Large set up in Jamshedpur, Baliguma and Howrah close to steel capital of India.
• Innovation Capability
  • Successfully transformed from a forging company to a an integrated product development firm providing cutting edge solutions.
  • Developed expertise in ring-rolling and machining complementing the forging business.
• Demonstrated Growth & Profitability
  • Revenues growth by over 72% from FY 14 to FY 15 with commissioning of new capacity with healthy EBITDA margin of 17%.
  • EBITDA growth of over 120% from FY 14 to FY 15 with to a RoACE of 10.7% and an RoE of 20.4%.
• Experienced Management & Marquee Client Base
  • Strong management with experience in Innovation, Product Development and Manufacturing.
  • Has marquee client base with all Top OEMs as clients including TATA Motors, Ashok Leyland, VE Commercials, along with component manufacturers like Automotive Axels etc.

RAMKRISHNA FORGINGS LTD. is one of the Multibagger Stocks, identified by Dynamic Research at the end of every month. RAMKRISHNA FORGINGS LTD can be a great investment opportunity which can give you high return. RAMKRISHNA FORGINGS LTD is a well analyzed Multibagger Stock, based on our technical and fundamental research, traded in very high volumes. Ramkrishna Forgings share price is currently trading at 381 at a P/E of 13.34. The stock has made a 52 week high of 781 on 4th August 2015 and 52 week low of 266.90 on 29th February 2016. The quick ratio is 1.27 signifying the company’s ability to meet its short term obligations with its most liquid assets. While the Debt Equity ratio is 1.74 and Return on Assets is 4.74 and return on Equity are 18.67 which are healthy compared to the benchmark figures. On the basis of technical analysis, the stock has given a 50% correction from its high of 781i n August 2015 and is now trading at 380 levels and has made a base of 350. Keeping in mind the investment rationale we recommend to buy the stock at its CMP of 380 for short term target of 440 and a medium term target of 530.