Kolkata, March 30 Ramkrishna Forgings Ltd expects 15-20 per cent growth in business on a year-on-year basis over the next three-to-four years. The company is hopeful of closing the current fiscal with a turnover of Rs 2,900-3,000 crore, up from Rs 2,285 crore it had recorded in FY-22, a growth of over 31 per cent. It also plans to clock a turnover of close to Rs 5,000 crore by FY-25.
The company, which is working on rejigging its product portfolio with an aim to grow the share of non-auto business, expects profitability to improve on the back of an increase in production and better efficiencies of scale.
Nearly 80 per cent of the company’s business comes from the auto segment, while the remaining 20 per cent comes from non-auto verticals. It expects the share of non-auto to grow to 30 per cent in the next three years, backed by steady demand from the Railways, oil and gas, highways and the farm equipment sector.
According to Lalit Kumar Khetan, whole-time director and chief financial officer, the EBITDA margin for the quarter ended December 31, 2022, stood at around 22 per cent and this is likely to increase by 120-150 basis points moving forward, on the back of new capacity addition and better economies of scale.
Capacity addition
The company is adding an additional 56,400 tonnes capacity and this is likely to come on stream by September. The additional capacity will raise the overall capacity to close to 2,35,000 to 2,40,000 tonnes.
The supplier of rolled, forged, and machined products, in consortium with Titagarh Wagons, was recently declared the Lowest Bidder (L1) by the Railways for manufacture and supply of forged wheels under the ‘Atmanirbhar Bharat’ initiative. It plans to set up a joint venture company and put up a manufacturing facility in eastern India to produce close to 200,000 forged wheels annually in the next three years. This will help strengthen the company’s foothold in the railways sector.
To diversify its product portfolio, the company has strengthened its foothold in the EV space and has recently acquired 51 per cent stake in TSUYO manufacturing. This will help improve its capabilities and expand the market share in the segment, he had said earlier.
The company is looking to invest close to Rs 100 crore in TSUYO and is looking to make products such as motor controllers, differential and e-axle and complete powertrains. It is also looking at high-wattage motors for heavier vehicles.
Its plan to acquire JMT Auto has received the nod from the Committee of Creditors, and is subject to obtaining the necessary approval from the NCLT, New Delhi.
JMT Auto has a mix of forging and casting capacity with value-add, and had a peak topline of close to around Rs 375 crore before going into insolvency.