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The board of directors of Ramkrishna Forgings Ltd has approved an investment of around ₹205 crore to acquire Multitech Auto Private Ltd and its wholly-owned subsidiary Mal Metalliks with a capacity to manufacture 21,600 mt per annum of machined SG & CI castings. Multitech Auto has the capacity for bar draw facility of 6,000 mt.
The acquisition marks a step forward in the company’s growth strategy, aimed at expanding its product line and fortifying its presence in the passenger vehicles, light commercial vehicles and heavy commercial vehicles segments, it said in a press statement.
Multitech Auto and Mal Metalliks presently manufacture assembly top cover, shift cylinder, assembly gear, differential case, various types of hubs and rollers for HCV brakes, among others.
The addition of new productlines is expected to contribute to the company’s financial growth, with an estimated turnover of ₹500-600 crore within the next two years, the release said.
“The strategic acquisition of Multitech Auto and Mal Metalliks marks a significant milestone in our efforts to fortify our market position and diversify our product offerings. With the integration of these companies, we are poised to strengthen our presence and deliver an enriched value proposition to our esteemed customers,” Lalit Khetan, Whole-Time Director & CFO, Ramkrishna Forgings, said in the statement.
The company also plans to acquire Mal Auto Products Private Ltd, which includes a strategic land parcel of 10 acres at a value of ₹15 crore as a part of its vision for future expansion.
Q1 results
Ramkrishna Forgings registered nearly 64 per cent growth in net profit at ₹77 crore for the first quarter ended June 30, 2023, as against ₹47 crore in the same period last year.
Revenue from operations on a standalone basis increased by nearly 28 per cent at ₹836 crore during the period under review as against ₹651 crore in the same period last year.
The company’s EBITDA margin improved marginally to 22.4 per cent (22.1 per cent).
The company’s scrip closed at ₹505.55 apiece, up 1.80 per cent, on the BSE on Friday.
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