Future growth expectations in sales/revenue/volumes?

Target to achieve INR 5,000 crores topline by FY '25, implying a CAGR of 25%-26% over two years. Addition of 56,000 tons capacity by September 2023 to aid growth. Expect 15%-20% growth in exports next year driven by new orders, new customers, and new geographies. Exports are expected to continue constituting about 35%-40% of volume and topline. Domestic market remains strong, though specific growth guidance for FY '24 is awaited. EV segment revenue from auto expected to double from current 2% to 3%-3.5% in next 12 months; overall EV contribution expected to reach ~5% in two years. Non-auto seg

Future growth expectations in earnings/operating earnings/profits/EPS?

The company aims to achieve INR 5,000 crores in topline revenue by FY '25, implying a CAGR of approximately 25-26% over the next two years. EBITDA margin of 22%+ is targeted to be maintained, with potential upside due to operating leverage as revenue grows. Export revenue is expected to grow by 15-20% next year, driven by new orders, customers, components, and geographies. EV segment revenue is projected to double from around 2% to 3-3.5% of auto revenue in the next 12 months, and reach about 5% in two years, largely from export markets. New capacity of 56,000 tons coming online by Sep

Current/ Expected Orderbook/ Pending Orders?

The company has won several orders, with execution yet to commence. For FY '24, they expect a 15% to 20% jump in exports primarily driven by new order books and new components. Regarding domestic orders, no specific revenue guidance was provided; full-year results are awaited for clarity. Export growth next year is expected at 15% to 20%, driven by new customers, new products, and new geographies. The company is cautiously optimistic about order inflow but refrains from giving exact figures for new orders or total pending order book. The addition of 56,000 tons of new capacity by September 202

Any current/future new fundraising through debt or equity?

No explicit mention of any new fundraising through debt or equity in the call transcript. The company is focused on reducing debt; has already reduced around INR 300 crores in nine months and expects another INR 50 crores reduction by March 2023. The company targets being net debt-free by FY '25-'26. Capex plans for FY '23 and FY '24 are INR 250 crores and INR 150-200 crores respectively, funded through cash accruals. Acquisition costs for JMT Auto (INR 125 crores) and ACIL (INR 85 crores) will be paid partly upfront and partly over next 4 years, without debt consolidation on RKFL balance shee

Any current/future capex/capital investment/strategic investment?

Current year (FY '23) capex plan is INR 250 crores, including ongoing capacity expansion (Page 13, 17). Next year (FY '24) capex is projected at INR 150-200 crores, including maintenance capex of INR 50-55 crores per annum (Page 17, 13). Additional capex of INR 100-150 crores expected to complete the 56,000-ton capacity expansion by next year (Page 13). Total capex for new capacity expansion around INR 250-300 crores (Page 13). Acquisition investments: INR 70 crores paid upfront for JMT Auto with a further INR 50 crores planned for capex and working capital (Page 5). Potential cash outflow for

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Ramkrishna Forgings LtdQ4 FY23Auto Components

Ramkrishna Forgings Ltd Q4 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹568P/E: 128.9Market Cap: ₹10.4K CrSector: Auto Components

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Target to achieve INR 5,000 crores topline by FY '25, implying a CAGR of 25%-26% over two years.
→Addition of 56,000 tons capacity by September 2023 to aid growth.
→Expect 15%-20% growth in exports next year driven by new orders, new customers, and new geographies.
→Exports are expected to continue constituting about 35%-40% of volume and topline.
→Domestic market remains strong, though specific growth guidance for FY '24 is awaited.
→EV segment revenue from auto expected to double from current 2% to 3%-3.5% in next 12 months; overall EV contribution expected to reach ~5% in two years.
→Non-auto segments like railways, mining, farm equipment are growing steadily.
→New capacities (cold and warm forging) expected to yield better realization and profitability.
→JMT Auto acquisition to add INR 450-500 crores topline over 18-20 months post NCLT approval.

Margin guidance

Category 3

→The company aims to achieve INR 5,000 crores in topline revenue by FY '25, implying a CAGR of approximately 25-26% over the next two years.
→EBITDA margin of 22%+ is targeted to be maintained, with potential upside due to operating leverage as revenue grows.
→Export revenue is expected to grow by 15-20% next year, driven by new orders, customers, components, and geographies.
→EV segment revenue is projected to double from around 2% to 3-3.5% of auto revenue in the next 12 months, and reach about 5% in two years, largely from export markets.
→New capacity of 56,000 tons coming online by September 2023 is expected to yield better realizations and margins because of near net shape components and newer technology.
→JMT Auto acquisition (pending NCLT approval) could add INR 450-500 crores topline after ramp-up in 18-20 months.
→Overall, earnings growth is expected to be strong with sustained margin levels backed by capacity addition, product mix improvement, and export growth.

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Fundraise plans

Yes

→No explicit mention of any new fundraising through debt or equity in the call transcript.
→The company is focused on reducing debt; has already reduced around INR 300 crores in nine months and expects another INR 50 crores reduction by March 2023.
→The company targets being net debt-free by FY '25-'26.
→Capex plans for FY '23 and FY '24 are INR 250 crores and INR 150-200 crores respectively, funded through cash accruals.
→Acquisition costs for JMT Auto (INR 125 crores) and ACIL (INR 85 crores) will be paid partly upfront and partly over next 4 years, without debt consolidation on RKFL balance sheet.
→The management does not indicate plans for raising fresh equity or debt currently; growth and capex are funded internally and through manageable debt increments specific to acquisitions.

Order book

Yes

→The company has won several orders, with execution yet to commence.
→For FY '24, they expect a 15% to 20% jump in exports primarily driven by new order books and new components.
→Regarding domestic orders, no specific revenue guidance was provided; full-year results are awaited for clarity.
→Export growth next year is expected at 15% to 20%, driven by new customers, new products, and new geographies.
→The company is cautiously optimistic about order inflow but refrains from giving exact figures for new orders or total pending order book.
→The addition of 56,000 tons of new capacity by September 2023 is planned, which will support revenue growth to INR 5,000 crores.
→No detailed numeric breakup of current order backlog was disclosed in the call.

Capex plans

Yes

→Current year (FY '23) capex plan is INR 250 crores, including ongoing capacity expansion (Page 13, 17).
→Next year (FY '24) capex is projected at INR 150-200 crores, including maintenance capex of INR 50-55 crores per annum (Page 17, 13).
→Additional capex of INR 100-150 crores expected to complete the 56,000-ton capacity expansion by next year (Page 13).
→Total capex for new capacity expansion around INR 250-300 crores (Page 13).
→Acquisition investments: INR 70 crores paid upfront for JMT Auto with a further INR 50 crores planned for capex and working capital (Page 5).
→Potential cash outflow for FY '24 could include INR 85 crores for ACIL and INR 70 crores for JMT Auto acquisitions, totaling ~INR 150-160 crores (Page 13).
→TSUYO investment planned over five years around INR 100 crores for EV-related products like motor controllers and e-axles (Page 6).

How does Ramkrishna Forgings Ltd rank vs peers in Auto Components?

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