Ramkrishna Forgings Ltd (RKFORGE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Ramkrishna Forgings Q2 FY27 earnings conference call hosted by 361 Capital Market Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I would now hand the conference over to Mr. Dinesh Kumar from 361 Capital Market Private Limited. Thank you and over to you sir.
Dinesh Kumar (361 Capital Market Private Limited): Thank you. Welcome to all the participants on behalf of 361 Capital Market for Ramkrishna Forgings Q2 FY27 post results conference call. From the management, we have with us today, Mr. Naresh Jalan, Managing Director, Mr. Chaitanya Jalan, Whole-time Director, Mr. Lalit Khetan, Whole-time Director and CFO, Mr. Milesh Gandhi, Whole-time Director and Mr. Rajesh Mundra, Vice President Finance and Company Secretary. I will now handover the call to the management for the opening remarks, to be followed by question and answer session. Over to you, sir.
Lalit Khetan (Ramkrishna Forgings Ltd): Thank you, Dinesh. Good evening, everyone, and thank you for joining us today to discuss the Q2 and H1 FY27 earnings of Ramkrishna Forgings Limited. I trust all of you have had the opportunity to go through the earnings presentation and financial results shared earlier today. Let me begin with a brief overview of the operating environment before discussing our performance for the quarter. The global economic environment continues to remain challenging with geopolitical tensions in Middle East,
Lalit Khetan (Ramkrishna Forgings Ltd): of new tariffs and supply chain dynamics affecting economic activity and business sentiments across markets. Currency movements, rise in input cost as well as a sharp rise in shipping costs also remain key areas to monitor. Despite these challenges, we are seeing encouraging business opportunities across markets and end-use applications, supported by customer requirements for reliable and diversified supply chains. In contrast to our the uncertain global environment, the do domestic economy continues to demonstrate strong growth momentum. GST collections were healthy, reaching approximately 6.15 lakh crore during Q2. Industrial activity has also strengthened, IIP growth of 7.4% in July and 8% in August. The automotive sector has witnessed particularly strong demand, with commercial vehicle and passenger vehicle sales growing by 28.7 and 30.7% respectively during Q2 FY '27. We have witnessed continued momentum in our performance, both in top line and profitability, supported by domestic demand, improving international business and our focus on operational efficiencies. Our efforts to expand our product portfolio portfolio, enter new segments and increase capacity utilization are contributing to more balanced and sustainable growth, even in the current backdrop of volatile and unpredictable global macroeconomic landscape. An important development over the past few years have been the significant expansion our of our manufacturing capabilities. Having completed a substantial part of our planned investments, our focus has now shifted towards improving utilization, increasing productivity and generating better returns from these assets. Our investments have strengthened our ability to address a wider range of customer requirements and support our expansion into new products and applications. Let me now share the key financial highlights for the quarter. For Q2 FY '27, consolidated revenue from operations stood at 1,405 crores, representing growth of 54.9% year-on-year compared with Rs. 908 crores in Q2 FY '26. On sequential basis, revenues were higher by 15.5% compared with Rs. 1,217 crores in Q1 FY '27. Our consolidated EBITDA, excluding other income, stood at Rs. 256 crores compared with Rs. 123 crores in corresponding quarter last year and Rs. 218 crores in Q1 FY '27. The EBITDA margin improved to 18.23% for the quarter compared with 13.5% in Q2 FY '26 and 17.96% in the previous quarter. The improvement in operating profitability reflects operating leverage through improved capacity utilization, improvement in product mix and operating efficiencies. Profit before tax for the quarter stood at Rs. 95 crores compared with a loss of 10 crores in Q2 last year and profit of 65 crores in Q1 FY '27. Profit after tax stood at 71 crores. This was higher by 47% on Q-on-Q basis. Debt during H1 FY '27 is reduced by 126 crores and we maintain our guidance of reduction in total debt by Rs. 500 crores for FY '27. Looking ahead, we remain positive about the business outlook. Our order pipeline remains healthy and our increasingly diversified product portfolio provides opportunities across both domestic and international markets. We believe that higher utilization of our existing capacity and improved product mix and continued operating operating discipline will support growth and profitability in the coming quarters. With that, I would now like to hand over the proceeding to Mr. Milesh Gandhi, our whole-time Director, who will take you through the order wins and key business development during the quarter. Thank you. Over to you, Milesh.
Milesh Gandhi (Ramkrishna Forgings Ltd): Thank you, Lalit-ji. Good evening, everyone. I would like to take you through the new order wins during quarter 2 FY '27 and share some updates on our key business segments. During the quarter, the company secured new order wins worth Rs. 673 crores across CV, EV, LV and farm equipment segments. These orders have a program life of approximately 4 years and further strengthen our revenue visibility over the coming years. Of the total orders received, approximately 48% came from the domestic market and balance 52% from the export market. We have secured orders worth Rs. 304 crores from the commercial vehicle and Rs. 272
Milesh Gandhi (Ramkrishna Forgings Ltd): from the light vehicle and rupees 7 crores from the electrical vehicle side. Worth mentioning against the new order wins 447 crores comes from the casting side of our business against which 272 crores is for the North American export market for light vehicle application. This also opens our door to the exports market from our casting business. The passenger vehicle segment continues to be an important growth area for us. We are expanding our forging and casting capabilities and new product developments. We are working towards increasing our presence in this markets and adding new customers. We have also secured orders worth rupees 90 crores from the farm equipment. This order win reflects our growing presence in the off-highway applications and our ability to serve wider range of customers. I would also like to share some updates on our railway business. We continue to see good opportunities in this segment particularly for our fully assembled bogies, frames, bolster and cast components. With the addition of new products and increased manufacturing capabilities, we are well positioned to participate in the growing demand from the Indian Railways. On the international side, we continue to work closely with our customers across North America and Europe. We find the market bullish across and our expanded capabilities and presence in Mexico is also helping us explore new opportunities and strengthen our customer relationship. We are also seeing increasing interest in our casting, aluminum forgings and higher value added products. Oil and gas products demands are also strong. With several new capabilities and capacities now available, our priority is to ramp up our production against confirm orders and improve our overall capacity utilization. Going forward, we remain confident about our order pipeline across both domestic and export markets, our growing product range and continued addition to our new customers should support business growth in the coming quarters. Further, our continuous efforts in new ventures within the boundaries of forgings and castings business in non-ferrous components and products, manufactured products from aluminum, titanium, inconel, and nimonic grades for aerospace, robotics and semiconductors are also progressing well. That's all from my side. Thank you.
Naresh Jalan (Ramkrishna Forgings Ltd): Thank you, Milesh. Dinesh, now we can open the floor for Q&A.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Vinit Shah from Dalal & Broacha. Please go ahead.
Vinit Shah (Dalal & Broacha): Thank you for taking my question and congratulations on a very good set of results. So my first question was related to our new and upcoming businesses. So like we already mentioned in our opening remarks of 447 crore of orders from the casting business, I just wanted to know what is our update on the other segments also like cold forging, aluminum forging and the casting business. So when will these orders be executed, what is the capacity utilization and how it is going to ramp up. So that is my first question.
Naresh Jalan (Ramkrishna Forgings Ltd): Milesh?
Milesh Gandhi (Ramkrishna Forgings Ltd): Yeah. So I think as I already stated that 447 order comes from our casting segment and I think in that you would have noted that 272 crores is coming from North America, that was for light vehicle application and that also opens our door for export market. Apart from that, with regard to our aluminum forgings and also from our cold forgings, we continue to export these products to the North American market and our capacity utilization in in both these lines are more than 50%. And I think we are trying to add more customer base there so that our utilization increases.
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