This article first appeared on GuruFocus .
Release Date: November 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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The domestic market showed strong performance with supportive macro fundamentals, including steady industrial output and moderating inflation.
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The company secured new orders worth INR 1,116 crores, with significant contributions from the automotive and railway sectors.
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Ramkrishna Forgings Ltd ( BOM:532527 ) has successfully diversified its revenue base, particularly with promising growth in the railway segment.
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The company is optimistic about achieving double-digit growth for the full year, with expectations of improved margins in the upcoming quarters.
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The board approved a significant capital infusion through the allotment of shares and warrants, which is expected to strengthen the company's financial position.
Negative Points
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The company faced a challenging global environment with geopolitical tensions and currency volatility impacting margins.
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There was a notable decline in consolidated revenue by 10.66% quarter-on-quarter, primarily due to subdued demand and tariff impacts on exports.
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The EBITDA margin decreased by 110 basis points, and the company reported a consolidated net loss for the quarter.
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Tariff-related disruptions in the US and Mexico markets led to reduced sales velocity and impacted the company's international business.
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The company experienced one-time losses due to equipment import costs and currency fluctuations, affecting overall profitability.
Q & A Highlights
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Q: Can you explain the disparity in revenue and margin expectations compared to the last call, considering the impact of tariffs? A: The tariff impact was initially underestimated. The tariff increased from 25% to 50% before being clarified back to 25% by the US government, causing a slowdown in dispatches. This affected both the US and Mexico markets, leading to reduced shipments to avoid inventory buildup. However, the situation is expected to improve from the first quarter of the US calendar year. (Respondent: Unidentified_2)
Q: What is the outlook for Q3 and Q4 in terms of revenue and margins? A: The company expects significantly better performance in Q3 compared to Q2. With capacity in place, they maintain their projection of double-digit growth for the full year, with higher EBITDA margins around 15-16%. The worst is considered to be behind them. (Respondent: Unidentified_2)
Q: Are there any more one-time losses expected in the future? A: Currency fluctuations are beyond control, and any further equipment-related losses will depend on currency movements. However, all necessary equipment has been acquired, and CapEx is complete. The company expects to start operations from March 2026, which should stabilize the situation. (Respondent: Unidentified_2)
Q: Can you provide clarity on the debt levels and future CapEx plans? A: Debt levels increased due to muted profits and cash program expenses. However, debt is expected to reduce by INR 500-600 crore by March 2026, with promoter infusion and improved sales. Future CapEx will be minimal, focusing on maintenance and completion of current facilities. (Respondent: Unidentified_2)
Q: What is the company's strategy for diversifying away from the US market? A: The company is securing orders from international markets, including Europe, and has received significant orders from the railway segment. They are focusing on diversifying their customer base and have made progress in developing samples and launching new products. (Respondent: Unidentified_2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
