RAMKRISHNA FORGINGS

Vendor of choice for machinery OEMs

Established in 1981, Kolkata-headquartered Ramkrishna Forgings Ltd, the second largest forgings company in India, is today a force to reckon with globally in the metal forming industry. It is known for supplying world-class forged and fabricated products to diverse sectors like automotive, railways, mining, earth moving, power, general construction, oil & gas, and engineering. The company operates 22 manufacturing plants and exports to over 23 countries, serving major global and domestic OEMs of engine components, transmission parts and railway coach/wagon parts. Major clients include Tata Motors, Ashok Leyland and various elite global truck manufacturers.

The company has been doing very well in its financial performance. During the last 12 years, its sales turnover has expanded five and a half times from Rs 754 crore in fiscal 2015 to Rs 4,238 crore in fiscal 2026, with operating profit increasing almost five times from Rs 131 crore to Rs 625 crore. However, the profit at net level has slumped over 82 per cent to Rs 71.80 crore, compared to fiscal 2025. The sharp drop in net profit was attributed to higher operational and tax expenses, input cost pressures and global market headwinds from geopolitical tensions affecting the automotive and industrial forging sectors. The steep decline in net profit prompted a selling avalanche and the stock price of RK Forgings tumbled from the 52-week high of Rs 692 to Rs 564.

However, the worst seems to be over of late and the subdued trend seen so far has started reversing, yielding place to a bullish sentiment. Consider: the trend started reversing as the company’s business became more diversified. While commercial vehicles remained important, RK Forgings started gaining traction in passenger vehicles, two-wheelers, railways, exports and non-automotive segments such as energy, mining and off-highway equipment. The management insisted that the company is entering a new phase of growth. And this is well reflected in the fiscal 2027 results so far.

BETTER TIMES

In order to come out of the depression caused by the slump in net profit in fiscal 2026, the management devised a new strategy of diversifying growth through new customer wins and market expansion. Fiscal 2027 started on a buoyant note with sales turnover in the first quarter (April-June 2026) registering a 19.84% spurt at Rs 1,217 crore over the corresponding quarter in the previous year, EBITDA spurting 47% at Rs 218.47 crore and net profit shooting up from Rs 11.7 crore to Rs 46.88 crore. The company’s financial position has turned distinctly robust with reserves shooting up to around 100 times its equity capital, debt coming down to around Rs 1,890 crore against the sales turnover of Rs 5,000 crore, and working capital shooting up to Rs 840 crore – the highest level in the company’s history so far.

The management is confident that RK Forgings is entering a new phase of growth. Export revenue is expected to reach 35% of consolidated revenue in FY 2027, the highest in the company’s history, while capital expenditure for 2027 is guided at Rs 350 crore. Return on Capital (RoC) is expected to be 12-15% in FY 2027. The company sees Rs 8,000 crore in revenue by FY 2029, implying a 22-25% compounded annual growth rate over the next 3 years.

BULLISH OUTLOOK

According to Naresh Jalan, Managing Director, the best period for RK Forgings has just started. Investors will see much more traction in terms of growth and balance sheet improvement in the coming quarters. Referring to the expanding order pipeline, he said, “We are flooded with orders. Indeed, these are very exciting times right now in terms of overall demand.”

As part of its diversification strategy, the company has set up an aluminium forgings plant at Jamshedpur with an investment of Rs 57.50 crore. This plant will mainly cater to the electric vehicle (EV) market. The aluminium forgings complex has already gone on stream. At optimum capacity, the project will generate additional revenue of Rs 175 crore per annum.

CAPACITY BOOST

In order to meet the rising demand for its products, the company has already undertaken a capacity expansion programme to raise the forgings capacity from 293,400 tonnes per annum (tpa) to 330,000 tpa, and castings capacity from 33,600 tpa to 62,400 tpa, with a road map of 78,600 tpa. This capacity expansion will give a boost to the top- as well as bottomline of the company.

The share price is quoted around Rs 625, and once the Middle East hostilities end, the stock is expected to move up to a four-figure (Rs 1,000) mark.

PERFORMANCE INDICATORS (Rs. in crore)

JTL INDUSTRIES

One-stop shop for variety of steel

Chandigarh-headquartered JTL Industries is one of India’s fastest growing steel tube and pipe manufacturers, specialising in electric resistance welded (ERW) black pipes, hollow sections, pre-galvanised and galvanised steel pipes, and solar module mounting structures. The company operates modern manufacturing facilities in Punjab, Maharashtra and Chandigarh, with a total manufacturing capacity of 9,36,000 mtpa across four facilities, with around 3,00,000 mtpa dedicated to backward integration.

JTL produces over 1,200 SKUs (stock-keeping units), including heavy structural steel, galvanised pipes, and AP grade pipes used in infrastructure, agriculture and solar energy. The company is doing well on the export front and is, in fact, a recognised star export house exporting GI pipes, MS black pipes, hollow sections and solar structures to 20+ countries across five continents.

Besides 1,200 SKUs, this flagship company of the Jagan group has an 800-strong skilled workforce and a network of 800 dealers and distributors. The company is ISO 9001:2015-certified, demonstrating its adherence to strict manufacturing products and commercial procedures. Since inception in 1991, the company has grown to emerge as one of the top five steel tube manufacturers, with a commitment to sustainable and environmentally friendly practices.

5-FOLD GROWTH

The company is doing fine on the financial front. During the last six years, its cumulative sales turnover has expanded about five times from Rs 435 crore in fiscal 21 to Rs 2,136 crore in fiscal 2026, with operating profit also advancing almost five times from Rs 33 crore to Rs 154 crore and the profit at net level shooting up over five times from Rs 20 crore to Rs 103 crore. What is more, prospects for the company going ahead are all the more promising. Consider: as per the new growth strategy devised by the management, the company is actively expanding into high-margin products and pursuing defence sector and non-ferrous manufacturing through targeted acquisitions and subsidiaries.

The company has 10 registered brands offering a cumulative 1,000-plus SKUs. These products find applications across diverse industries such as construction, core infrastructure, heavy vehicles, water distribution and energy. With a network of over 1,000 dealers and distributors, it effectively serves the entire nation and even international markets spanning 20 countries across five continents.

JTL has been granted permission by the National Company Law Tribunal (NCLT) to commence operations at RCI Industries and Technologies. JTL had entered into an MoU with RCI for production of up to 200 tonnes per month of copper and brass alloys. This manufacturing facility will enable JTL to supply bullet castings and other non-ferrous metal products critical to the defence sector, pushing up its top- as well as bottomline with effect from fiscal 2027. With the green signal from NCLT, the Baddi (Himachal Pradesh) plant of RCI will be under the complete ownership of JTL. This measure will not only help JTL enter new segments but also help it gain new customers and relationships.

NEW TECH

To enhance its manufacturing capabilities, the company recently implemented Direct Forming Technology (DFT) at its Mangaon (Maharashtra) facilities, which will cover an output of around 1 lakh tonnes. This initiative will not only enhance capacity utilisation and manufacturing efficiency but will also open doors to new geographical markets. It will also increase the SKUs to 1,500.

Simultaneously, the management is strategically outlining a significant capacity expansion initiative in Maharashtra through its subsidiary, JTL Tubes Limited, which will further elevate the company’s manufacturing capability, allowing it to broaden its product portfolio, and offer an array of products under one roof.

In order to meet the desired target, JTL will raise Rs 1,310 crore through various means, including Rs 810 crore via fully convertible warrants on a preferential basis through the promoter and non-promoter categories. The remaining Rs 500 crore will be raised through the QIP route. Post expansion, its kitty of value-added products will increase, which will in turn increase EBITDA per tonne.

IN WATER INFRA

The company has received an order of Rs 27 crore for the supply of galvanised iron (GI) pipes for water supply and distribution projects undertaken under the ‘Jal Shakti’ initiative of the government of Himachal Pradesh. The order highlights JTL’s growing presence in the water infrastructure segment and reflects its capability to cater to large-scale institutional and government requirements.

Shares of JTL are quoted around Rs 73 (face value Re 1). After the HP government’s order, JTL’s status has improved. Many analysts feel that the company’s prospects are improving and the price can reach the Rs 100 mark within a year or so.

PERFORMANCE INDICATORS (Rs. in crore)