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Ramkrishna Forgings Q2 Review - New Order Wins, High Margin Territory To Aid Rerating: Reliance Securities

Ramkrishna Forgings Q2 Review - New Order Wins, High Margin Territory To Aid Rerating: Reliance Securities

<div class="paragraphs"><p>Hot forged bearing components move along a conveyor. (Photographer: Krisztian Bocsi/Bloomberg)</p></div>
Hot forged bearing components move along a conveyor. (Photographer: Krisztian Bocsi/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Reliance Securities Report

Ramkrishna Forgings Ltd. delivered a strong performance in Q2 FY22, with a historical high Ebitda margin of 24% and profit after tax rising by 24 times YoY to Rs 501 million.

Revenue grew by 129% YoY/39% QoQ to Rs 5.8 billion, on the back of a volume increase of 82% YoY/29% QoQ to 28,279 tonnes, owing to a rise in medium and heavy commercial vehicle sales in the wake of an economic recovery post pandemic and healthy export volumes.

Ebitda increased by 205% YoY to Rs 1.4 billion, while Ebitda margin expanded by 600 basis points YoY to 24% on better operating leverage, despite a 630 basis points QoQ rise in raw material/sales to 45.1%.

Despite a higher input cost, better product-mix with higher exports contribution led to better operating leverage, which benefited Ramkrishna Forgings’ margin.

Click on the attachment to read the full report:

Reliance Securities Ramkrishna Forgings Q2FY22 Result Review.pdf

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