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ramkrishna forgings Ltd. Call Transcript 2026
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Call Transcript
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RAMKRISHNA FORGINGS LIMITED
Date: May 11, 2026
| To
The Listing Department
BSE Limited
Phiroze Jeejeebhoy Towers,
Dalal Street,
Mumbai – 400 001 | To
The Listing Department
National Stock Exchange of India Limited
“Exchange Plaza” C-1, Block G,
Bandra-Kurla Complex, Bandra (E),
Mumbai- 400 051 |
| --- | --- |
| BSE SCRIP CODE: 532527 | NSE SYMBOL: RKFORGE |
Dear Sir/Madam,
Sub: Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Earnings Call Transcript – Q4 & FY’26
This is further to our intimation dated April 22, 2026, with respect to Earnings Conference call with Analysts/Investors on the Audited Financial Results of the Company for the quarter and financial year ended March 31, 2026.
Pursuant to Regulation 30 read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the Earnings Conference Call Transcript held with Analysts/Investors on Monday, May 04, 2026, at 16:00 Hours (I.S.T).
This intimation is also being uploaded on the website of the Company at www.ramkrishnaforgings.com.
This is for your kind information and records.
Thanking you,
Yours faithfully,
For Ramkrishna Forgings Limited
RAJESH MUNDHRA
Digitally signed by RAJESH MUNDHRA
Date: 2026.05.11 13:30:27 +05'30"
Rajesh Mundhra
Company Secretary & Compliance Officer
(ACS 12991)
Encl.: As above
REGISTERED & CORPORATE OFFICE
23 CIRCUS AVENUE, KOLKATA 700017, WEST BENGAL, INDIA
PHONE: (+91 33)4082 0900 / 7122 0900, FAX: (+91 33)4082 0998 / 7122 0998, EMAIL: [email protected], WEB: www.ramkrishnaforgings.com
CIN NO. :L74210WB1981PLC034281
Page 1
RAMKRISHNA FORGINGS LIMITED
Ramkrishna Forgings Limited
Q4 & FY '26 Earnings Conference Call
May 04, 2026
MANAGEMENT:
- Mr. Naresh Jalan – Managing Director
- Mr. Chaitanya Jalan – Whole-time Director
- Mr. Lalit Khetan – Whole-Time Director and Chief Financial Officer
- Mr. Milesh Gandhi – Whole-Time Director
- Mr. Rajesh Mundhra – Vice President-Finance and Company Secretary
Moderator: Mr. Annamalai Jayaraj – 360 One Capital Market Private Limited
External Participants:
- Annamalai Jayaraj – 360 One Capital Market Private Limited
- Balasubramanian – Arihant Capital
- Aditya Kumar – Old Bridge Mutual Fund
- Ayush Goyal – CAVI Capital
- Kiran Naik – Mody Fincap
- Darshil Jhaveri – Crown Capital
- Sunny Gosar – MK Ventures
- Kumar Saurabh – Scientific Investing
- Vinil Shah – Dalal & Broacha
- Saket Saurabh – Sagari Capital
- Kiran Garge – Knightstone Capital Management LLP
- Kunal Bhatia – Dalal and Broacha
- Kushal – Asian Broking
Q4 & FY'26 Earnings Conference Call Transcript
Moderator:
Ladies and gentlemen, good day and welcome to the Ramkrishna Forgings Limited Q4 FY26 Earnings Conference Call hosted by 360 ONE Capital Market Private Limited.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone.
I now hand the conference over to Mr. Annamalai Jayaraj from 360 ONE Capital Market Private Limited. Thank you and over to you, sir.
Annamalai Jayaraj:
Thank you. Welcome all the participants on behalf of 360 ONE Capital Market for Ramkrishna Forgings Limited Q4 FY26 and FY26 post-results conference call.
From the management, we have with us today, Mr. Naresh Jalan, Managing Director; Mr. Chaitanya Jalan, Whole-Time Director; Mr. Lalit Khetan, Whole-Time Director and CFO; Mr. Milesh Gandhi, Whole-Time Director; and Mr. Rajesh Mundra, Vice President Finance and Company Secretary.
I will now hand over the call to the management for opening remarks to be followed by the question-and-answer session. Over to you, sir.
Lalit Khetan:
Thank you, Jayaraj. Good evening, everyone and thank you for joining us on this call to discuss the Q4 FY26 earnings. I trust all of you have had a chance to review the earnings document that we have shared with you.
In Q4 FY26, the global macroeconomic environment turned incrementally more challenging, although conditions continue to vary significantly across regions and sectors. While the quarter commenced on a relatively stable footing, carrying forward momentum from the prior period, the outbreak of conflict in Middle East adversely impacted operating conditions towards the latter part of the quarter. As a result, the energy price volatility, persistent inflationary pressures, and renewed supply chain disruptions created uncertainty for a certain business environment.
In contrast, the domestic macroeconomic environment remained relatively favourable. India continued to stand out as one of the fastest-growing major economies, supported by resilient consumption, sustained government capex, infrastructure activity, and improving manufacturing momentum.
Page 2
RANKRISHNA FORGINGS LIMITED
Against this backdrop, we are pleased to report an improved performance in the fourth quarter, enabling us to end FY26 on a strong note. Volumes in domestic market have been strong.
Following the GST rate rationalization in September, there has been sustained momentum in domestic auto industry in India. This resulted in sustained momentum in wholesale volumes with all segments such as M&HCV, tractors, PVs reporting double-digit growth in the fourth quarter.
As we had indicated, the Railway business has been a strong pillar of growth. We have taken steps to deepen our footprint and enhance capabilities in this segment in recent years. These are now paying dividends as the share of business from railways grown to 7.5% of revenue in this year against 4.6% a year ago.
Now let me share some financial highlights for the quarter. We reported consolidated revenues of Rs. 1,216.78 crores, that is higher by 28% on year-on-year basis compared to Rs. 947.21 crores in Q4 FY25. On a quarter-on-quarter basis, revenue was higher by 11% compared to Rs. 1,098.52 crores in Q3 FY26. Strong performance in domestic market supported by resilient performance in international market helped us to deliver solid top-line growth on a year-on-year basis as well as on Q-on-Q basis.
EBITDA excluding other income is Rs. 208.19 crores in Q4, higher by 111% year-on-year compared to EBITDA of Rs. 98.5 crores in Q4 FY25. On Q-on-Q basis, EBITDA was higher by 27% compared to Rs. 163.37 crores in Q3 FY26. The margin improved to 17.1%, higher by almost 220 basis points quarter-on-quarter.
Profit before tax is Rs. 64.33 crores in Q4 FY '26 compared to Rs. 29.69 crores in Q3 FY26, reflecting a 117% quarter-on-quarter growth. Profit in the consolidated accounts has been impacted by around Rs. 10.4 crores due to elimination of profit of Rs. 5.9 crores from the subsidiaries and loss of Rs. 4.5 crores from the Mexico subsidiary. Otherwise, the net profit could have been much higher on the consolidated basis.
On the full-year numbers, we reported consolidated revenue of Rs. 4,238 crores for the full year FY '26, that is higher by 5% on year-on-year basis compared to Rs. 4,034 crores in FY '25. EBITDA stood at Rs. 642.70 crores for FY '26, that is higher by 15% year-on-year compared to Rs. 559.56 crores in FY '25.
Q4 & FY'26 Earnings Conference Call Transcript
Q4 & FY'26 Earnings Conference Call Transcript
Page 4
R&F&F
RAMKRISHNA
FORGINGS
LIMITED
Profit before tax is Rs. 112.58 crores in FY26 compared to Rs. 148.79 crores excluding exceptional item in FY25, that is lower by 24% year-on-year.
Additionally, our rail wheel joint venture remains on track with commencement of production anticipated by Q1 FY27. With these growth levers firmly in place, we are confident that from the next quarter onwards, we will return to further improved operating trajectory and look to sustain the momentum throughout FY27.
With that, I would like to hand over the proceedings to Mr. Milesh Gandhi, Whole-Time Director. Thank you. Over to Milesh.
Milesh Gandhi:
Thank you. During the Q4, the Company secured new orders worth Rs. 594 crores for the program life of four years. 56% of these orders were from Automotive segment and balance 44% were from the Non-Automotive segment, reflecting continued progress in Company's diversification strategy.
Out of the Rs. 594 crores, Rs. 334 crores came in the Auto sector, of which Rs. 323 crores came from the CV sector and Rs. 11 crores came from the EV sector. And in the Non-Auto sector, Rs. 258 crores came from the energy segment itself and Rs. 2 crores from the off-highway. That's from my side. Thank you.
Lalit Khetan:
Thank you, Milesh. So over to Jayaraj.
Annamalai Jayaraj:
Operator, you can go for Q&A.
Moderator:
Thank you very much. We will now begin the question-and-answer session.
Annamalai Jayaraj:
Before somebody joins from the question queue, sir, how is the demand shaping in US market, sir? I was asking how is Class 8 volumes picking up in the recent times?
Naresh Jalan:
I think Class 8 trucks are very, very strong right now. I think since last 3 months, we are seeing destocking happening in our warehouses in North America. And I think we are looking at fresh revenues coming in from this quarter onwards from North America Class 8 trucks in significant manner.
Annamalai Jayaraj:
And you expect this to sustain for some time, sir, at least a year or two?
Naresh Jalan:
I think at least for 2 years. For calendar year, it is good to say that it's going to stay till third quarter of calendar year '27.
Q4 & FY'26 Earnings Conference Call Transcript
Page 5
RAMKRISHNA FORGINGS LIMITED
Moderator:
Thank you. We have first question from Balasubramanian from Arihant Capital. Please go ahead.
Balasubramanian:
Good evening, sir. Thank you so much for the opportunity. Sir, on the wheel set plant, mentioned it will be commencing from Q1 FY '27 onwards. Whether we have submitted 300 trial wheels and for the approval? And from Q1 onwards, what kind of run rate we can expect quarter-on-quarter basis in terms of volume?
Naresh Jalan:
No, I think 300 wheels we are supposed to submit in the month of June or July. I think when Lalit said we are going to commence production, it means we are starting the plant, I think probably by end of May or June, wherein we'll start manufacturing wheels and commercial production will start immediately.
So, we don't need to wait for 300 wheels to get approved. Once these 300 wheels are supplied, we can continue supply. This year, we are looking at supplying almost 40,000 wheels from that plant to the Indian Railways.
Balasubramanian:
So, this will start from the coming financial year onwards, right, sir? The 40,000 wheels will reflect FY '27 onwards?
Naresh Jalan:
FY '27 onwards.
Balasubramanian:
Okay, sir. What kind of utilization level we can expect, sir, out of 2 lakhs? So, the 40,000 will be delivered in this financial year itself, right?
Naresh Jalan:
Yes, 40,000 will be delivered in this financial year.
Balasubramanian:
So, I think then it will solve the whole industry problem. Is it the right way to understand, sir?
Naresh Jalan:
I don't know about the industry problem. I think as per our contractual obligation, we are supposed to supply 40,000 wheels. We are gearing up to supplying 40,000 wheels in this year.
Balasubramanian:
Okay, sir. Sir, on the diversification side, I think we are targeting 10% plus kind of revenue from PV in the next 2 years. Also trying to be a primary supplier for EV, CV makers and aerospace alloys trials also we can. Trying to understand like what kind of specific defense or aerospace contracts we are focusing on and what kind of contracts we are focusing to get post aluminium forging commissioning side?
Naresh Jalan:
No, already I think post commissioning of aluminium forgings, we have already started bulk supplies to EV suppliers, EV equipment manufacturers globally in terms of the needs of aluminium forgings. And
Q4 & FY'26 Earnings Conference Call Transcript
Page 6
R&F&F PARKING
we are also developing few more aluminium forgings from that facility to supply to these CV manufacturers globally.
And in terms of other alloys, we are looking at getting into aerospace. We are exploring opportunities to set up a capacity to manufacture titanium and other stainless-steel products. So, we are bidding for several opportunities within domestic market as well as global market. But right now, we don't have any contract per se to basically have any realistic numbers to this. We are already in talks with several OEMs globally and within India to buy higher alloy material basically for aerospace activity.
Balasubramanian: Yes, sir. Sir, on the capacity utilization side, the forging utilization, it's mentioned nearly 70% in Q4. But if you look at last year Q4, it's 83%. But if you look at cold forging, the capacity utilization is almost 40% kind of range. Like if you could share how we are going to ramp up to 80% to 85% kind of range by FY27?
Naresh Jalan: No, I think vis-à-vis last year when you compare, you have to also take in account the capacity of 8,000 ton pressline and other addition in terms of overall forging capacity which we have had. And basically, this capacity utilization is going to happen from order book already in place. We are very hopeful that this year we will have a much better utilization vis-à-vis the last quarter.
And in terms of cold forging, we are at 40% because approvals in cold forging is mainly to the passenger vehicle sector. And this is taking more time in the global market to get approvals in place. As and when approval gets in place, utilization will improve. And to be putting a timeline to it, I think we are not able to do that. But we are pretty hopeful by this year-end, we should be having close to around 75% to 80% utilization from cold forging also.
Balasubramanian: Got it, Sir. Thank you, sir. Thank you so much for the detailed explanations. All the best.
Moderator: Thank you. The next question is from the line of Aditya Kumar from Old Bridge Mutual Fund. Please go ahead.
Aditya Kumar: Hi, thank you for the opportunity and congratulations on a good set of numbers, sir. Sir, my first question is on the presentation that you have shared. So, it has been showcased that Rs. 1,550 crores of new orders will be executed in FY27. So, does that include castings also or is it only forgings stand-alone business that it is showing?
Naresh Jalan: No, it is consolidated - forging and casting together.
RANKRISHNA FORGINGS LIMITED
Aditya Kumar:
Okay. So how much of that, so how much castings volumes are we expecting this year because we are sitting on significant capacities of 78,000 tons and earlier also, we have indicated that we have an order book for that. So how much are we expecting this year?
Naresh Jalan:
We are looking at almost 85% to 90% utilization in casting over the quarters, in coming quarters in this year.
Aditya Kumar:
80% to 90%. So close to around I would say 65,000 to 70,000?
Naresh Jalan:
Close to full utilization, I think. Very safe to say that close to full utilization this year.
Aditya Kumar:
Okay. So that's great to hear. So that's basically around if I take that number, then that's basically around incremental Rs. 900 crores of revenue from castings?
Naresh Jalan:
I will not put a number to it, but we are safely looking at almost 85% to 90% utilization in the full-year basis. But it may not come in the first quarter itself, but gradually over next two quarters because samples, approvals and other things are taking some time. So, we are looking at by first half almost to reach there.
Aditya Kumar:
Sure, sure. So, I came to that number because of the realizations that has been shared on the presentation. I came to that number on that basis. So, what kind of margins can we expect here, sir?
Naresh Jalan:
No, for margins for castings?
Aditya Kumar:
Yes.
Naresh Jalan:
For castings, I think Lalit, you will be able to tell better, Lalit.
Lalit Khetan:
Margins in the casting will be somewhere around 15% to 16%, Aditya. And in terms of what you were asking in terms of top-line growth, see 62,000 tons is the capacity and we have already produced 26,000 for the last year. But that's the production. In terms of sales, sales is always lower due to the machining mix. And we expect another Rs. 400 to Rs. 500 crores of revenue for the full year from the casting business on that account.
Aditya Kumar:
And, on the cash flow part, so what kind of capex are we looking at this year and what is the debt target, net debt target for FY27? Because I feel most of the investments have been done now and with good business outlook going ahead, we should be looking at debt reduction if you can help us understand that.
Q4 & FY'26 Earnings Conference Call Transcript
RANKRISHNA FORGINGS LIMITED
Lalit Khetan:
Certainly, we are looking at a quite significant debt reduction in this year on the back of promoter funding and good performance. All this, so we are looking to reduce the debt by at least Rs. 400 to Rs. 500 crores in this year.
Aditya Kumar:
Okay, And one bookkeeping question, sir. So as mentioned in the presentation, there is some casting business sitting in the standalone business and some sitting in the consol part or the subsidiary. So out of the 16,600 tons that we have sold this year, how much of that would be in the standalone if you can help me on that?
Lalit Khetan:
So standalone business commenced just on 31st March commercial production. So, nil from the standalone on FY26.
Aditya Kumar:
Okay, Got it. And just one last question, sir. This is on the other business. So, we also started one trailer axle business a few years back. If you can help us, give us some update like what kind of revenues have, we clocked from that trailer axle business in FY26 and what's the progression there and what kind of market share and target we are looking for in FY27?
Naresh Jalan:
So, I think in trailer axle, we roughly had an around Rs. 120 crores business from there in last year. Roughly, exact figures I don't have right now. At a market share, I think we are at about 4% or 5% market share. In two years, we have been able to make good amount of inroads and satisfaction and this being a first B2C business for us. I think we are pretty satisfied with the performance of getting into around 4% to 5% market share. And I think this year, we are looking at almost doubling this business to Rs. 250 crores and to a market share of about 10%.
Moderator:
We have next question from Ayush Goyal from CAVI Capital.
Ayush Goyal:
So, my first question was regarding the presentation. Like in this quarter's presentation, the order that has split over the next 4 years for financial year 2027 is Rs. 1,550 crores. And in the last presentation, it was Rs. 2,200 crores. So, like there's a Rs. 600 crores reduction. So, have any of the orders been revoked or something?
Lalit Khetan:
No, no. So, Ayush, how it works. So, it was incremental order. So last presentation what you see for that was incremental order for FY26 which has gone. So residual order has come here in FY27.
Ayush Goyal:
Okay. So basically, the order was executed earlier than expected?
Lalit Khetan:
No, no. I mean, so see what you are looking at FY28, again it is Rs. 2,800 crores, but Rs. 1,100 crores incremental over FY27. You understand that? So, there was some adjustment every year. I hope you understand.
Q4 & FY'26 Earnings Conference Call Transcript
Q4 & FY'26 Earnings Conference Call Transcript
Page 9
RALIEN
TWENTY SECRETARIAT
RAMKRISHNA
FORGINGS
LIMITED
Ayush Goyal:
Okay. Yes, got it, sir. And like with the new added capacity in the Press segment, how do we expect the utilization to improve going forward? Like quarter-on-quarter, what percentage can we expect?
Naresh Jalan:
No, on a full-year basis, I think it is not right for us to say quarter-on-quarter. It's very difficult because of the approvals and other things. But it is safe for us and better for us to say that by this year-end, this financial year-end FY27, we are looking at almost 85% utilization in our press plant.
Ayush Goyal:
Okay, that's great. And one last question I had. Like with the rising commodity prices, what effect does it have on our P&L? Like when we book an order, so we take an order on the spot price, right?
Naresh Jalan:
No, as earlier also expressed, all our pricing is based on pass-ons. So, I think with a quarter lag, we pass on all the price increases of commodities. Basically, mainly for commodity for us is steel. Steel is pass-on for us every quarter.
Ayush Goyal:
So largely our margins will be not affected by this?
Naresh Jalan:
No. Other commodities like consumables like gas and other things are basically which affects our bottom line. So, that is on a yearly basis we are discussing with customers, and I think most of our customers agree with the current scenario because of this geopolitical issue. And we are expecting compensation on account of all these geopolitical issues in terms of price increases to come to us soon.
Ayush Goyal:
Okay. Thank you so much, Sir. That's all from my side.
Moderator:
Thank you. The next question is from Kiran Naik from Mody Fincap. Please go ahead.
Kiran Naik:
Thank you for giving me an opportunity, sir. Sir, can you give me a rough idea what will be the revenue growth in FY27?
Naresh Jalan:
No, I think we will not be able to give any number to FY27. But with the current order book and with the current capacities in place, we are looking at continued growth trajectory, and we are looking at a healthy growth in FY27.
Kiran Naik:
Okay. And EBITDA margin for '27?
Naresh Jalan:
It will continue to, I think with what if you have seen quarter-on-quarter 200 basis points we have improved in terms of our EBITDA margins. And I think with the current scenarios in place, we are looking for healthy growth in both our top line and the bottom line of the company.
Q4 & FY'26 Earnings Conference Call Transcript
Page 10
RAMKRISHNA
FORGINGS
LIMITED
Kiran Naik:
Okay, thank you, Sir.
Moderator:
Thank you. The next question is from Darshil Jhaveri from Crown Capital. Please go ahead.
Darshil Jhaveri:
Hello, good evening, sir. Thank you so much for taking my question, sir. Firstly, congratulations on the great set of results, sir. Sir, just wanted to, like, confirm like in terms of casting when we are saying we'll be at near full utilization. So, did I hear correctly, sir, we could do nearly Rs. 900 crores of additional revenue from that, sir?
Naresh Jalan:
No, no, we have not put any number to it. I think Lalit has clarified out of the 70,000 odd tons of casting capacity, already current utilization we are getting a significant revenue. Additional casting capacity which has come in the by end of March, this is going to create a at the current commodity levels, Rs. 400 to Rs. 500 crores revenue in the coming years.
Darshil Jhaveri:
Okay. So, the new March capacity would be around Rs. 400 crores - Rs. 500 crores. And sir, sorry but I'm a bit new to the company. So, when we talk about the wheel sets, so we are expecting to do around 40,000 wheel sets. So, what are the unit economics of it? Like is this on a similar margin that our company does on a consolidated level and also in terms of what is the selling price? So, could you help me with that, sir?
Naresh Jalan:
I cannot give you the selling price, but I can tell you that the wheels are in a similar trajectory of the forging business we do right now. And it is a new capex and we have set up a capacity for 230,000 wheels. This year railway offtake guarantee is for 40,000 wheels which we are getting ready to supply in this financial year.
Darshil Jhaveri:
Okay, okay. So, is this like on a broad basis the incremental revenue would be how much from the wheel set, sir?
Naresh Jalan:
So, I think selling price, it is right now very difficult for me to tell you because the contract was awarded two years back. So, we will need to have a real-time pricing done with two years of inflation and other things to capture and get to the new pricing. So, I will not be able to give you exact number right now. But we should be anything between Rs. 400 crores to Rs. 450 crores roughly in terms of revenue from the wheel plant.
Darshil Jhaveri:
Okay, okay. No, that's fair enough. Yes, yes, that's it from my side, Sir. Thank you so much.
Moderator:
Thank you. The next question is from Sunny Gosar from MK Ventures. Please go ahead.
RANKRISHNA FORGINGS LIMITED
Sunny Gosar:
Thank you for taking my question and congratulations on a good set of numbers for the quarter. So, my first question is on the overall peak revenue potential. So, we've almost now expanded to about 400,000 tons of capacity. So, assuming a normalized utilization and adjusting for seasonality in the business, what is the peak volumes or peak revenue if you can give some colour either on one of them over the next two to three years we can achieve with this current capacity that we have already set in place?
Naresh Jalan:
No, I think Sunny, putting a revenue number I think it is difficult. Revenue number is absolutely dependent on the commodity pricing. But in terms of utilization, we are looking at almost 80% utilization this year in terms of our capacity. Means close to around go to around 350,000 tons of overall forging and casting put together in terms of our utilization. And I think that's, that's the ballpark we are working with.
Sunny Gosar:
Got it. Got it. And second question is in terms of the domestic and export mix. So, this year our domestic performance has been very strong with strong CV demand and the mix which used to be about 40% to 42% export and 58% to 60% domestic have seen a swing towards higher share of domestic. So, based on the current visibility in terms of the order book or customer discussions that you are having, how do you see this domestic-export mix moving over the coming one or two years and how does the domestic-export mix impact the overall margins? Does, does higher export mean better margin profile and how is the outlook on that?
Naresh Jalan:
So, I think with the current trend in the overall overseas market and with the new order wins in the European market, we are expecting in next two years our export mix to significantly improve. And I think historically which was 60:40, I think we are looking at going above 40 in terms of our export volumes in the overall scenarios, current scenarios.
And export is always highly remunerative than the domestic market. So, we are very confident with the current order book and with whatever is playing around in terms of the overall global market and the demand side, we are very confident that our margins also will considerably improve going into coming quarters.
But it may not happen immediately, but into going onto next eight quarters, roughly two years, our margins should be significantly improved with export volumes better than previous of 40%.
Sunny Gosar:
Got it, got it. That's very helpful. And my last question is around the capacity and the capex. So basically, our utilization in the last quarter was around 65% to 70% and we have already expanded capacity. So how do
Q4 & FY'26 Earnings Conference Call Transcript
Q4 & FY'26 Earnings Conference Call Transcript
Page 12
you see the capex intensity for say FY27 and FY28? Because we've spent about Rs. 800 crores plus of capex over the last two years. How will that number look like say in the next two years?
Naresh Jalan:
Sunny, this year we are looking at more of consolidation. I think with the contribution in JV, I think we are not looking at capex and maintenance. We are not looking at capex of more than Rs. 300 to Rs. 400 crores maximum to the tune of Rs. 400 crores. That also may be most of may get into only value adds and our contribution into the joint venture. And most of our thrust will be in terms of debt reduction. Lalit has already given a ballpark of close to Rs. 400 crores to Rs. 500 crores of debt reduction over this financial year.
I think this year by this financial year-end, we should be anything above 80% to 85% in terms of our existing capacity utilization. From wherein in FY 2028, we are looking for further capex to grow the business into the next level. But we have not yet basically frozen any capex plan for FY 2028 right now. So still, we are talking to customers and getting their feedback in terms of what next to do in terms of the overall capacity requirements.
Sunny Gosar:
Got it. And in terms of our cash outflow, whatever contribution had to go for the JV, has that been paid for or there is more equity that is yet to be?
Naresh Jalan:
Some more part is left. I think Lalit can give the exact number.
Lalit Khetan:
Yes, about Rs. 50 crores will further go, Sunny, in this year.
Naresh Jalan:
So, taken that Rs. 50 crores, Sunny, that the ballpark number is around close to around Rs. 400 crores of capex is taken into account of that Rs. 50 crores.
Sunny Gosar:
Got it. This is very helpful and all the best for the coming quarters and the year ahead. Thank you so much.
Moderator:
Thank you. The next question is from Kumar Saurabh from Scientific Investing. Please go ahead.
Kumar Saurabh:
Yes. Sir, I have one question on the aluminium capacity which is there. In terms of realization or margin, how is this business?
Naresh Jalan:
Commodity price itself is close to around Rs. 400 per kg. So obviously realization per ton is going to be always higher because of the commodity pricing. Margins are close to around 14% to 15% at the absolute numbers.
Kumar Saurabh:
Okay, okay. So almost similar to our current business. So, it should not.
RANKRISHNA FORGINGS LIMITED
Naresh Jalan:
No, in terms of contribution, I think it is much higher because 14% to 15% you get on the Rs. 400 per kg also. So overall I think contribution is much higher than the current ones.
Kumar Saurabh:
Okay, okay. And sir, I think currently our all-total fixed asset is around Rs. 4,000 crores and historically I think if we take a blended fixed asset turnover, it's somewhere around 1.5, 1.6, which takes us to almost Rs. 6,000 crores revenue. I'm not looking for exact number, but ballpark kind of number. So, like do you have any plans that when you want to utilize this full capacity given, we have done with major capex and now you know this is time to reap all the capex which we have invested?
Naresh Jalan:
So, we are looking at during this year, I think by third quarter or fourth quarter to reach close to around 80%-85% plus utilization in terms of our overall capacity.
Kumar Saurabh:
And sir, historically when we shift from let's say you know say 70% kind of utilization number to our peak utilization number, historically we have had higher margins. So do you see possibility, I know you have said that and this quarter also we have done well on margin and you know you are expecting it to improve. But do you see possibility of going back to the previous highest utilization peak margins?
Naresh Jalan:
I will not put a number to it, but we are very confident of continuing to improve in terms of margins. And I think that is what best we can guide for right now. And we continue to work on margins, and I think rest I think in terms as utilization improves, as we start delivering the numbers, margins are going to be much better than what is expected.
Kumar Saurabh:
Great, great. And sir, I think in our business in casting and forging, energy is a major cost item and given whatever is happening globally in terms of you know the whole energy thing. So, do you see any major pressure on the raw material, on the expense side because of energy or like how do you see it panning out?
Naresh Jalan:
Raw material is completely pass-on for us. With a one quarter lag, it's completely pass-on for us. So, we don't get affected by the raw material increase. But in terms of other consumables, a major consumable in terms of commodity is gas for us post the raw material. To the earlier question also I've answered, with the current geopolitical issues, we have gone back to the customers in terms of force majeure clauses. And we are very pretty hopeful that the customer will compensate us to the maximum possible in terms of the gas energy price increase.
Kumar Saurabh:
Great. Thanks a lot, Sir. I'll come back in the queue. Wish you all the best.
Q4 & FY'26 Earnings Conference Call Transcript
RANKRISHNA FERGINGS LIMITED
Moderator: Thank you. The next question is from Vinil Shah from Dalal & Broacha. Please go ahead.
Vinil Shah: Hello, sir. Good evening. Thank you for the opportunity. So, my question was in respect of realization for our forgings. So even if we take our annualized capacity utilization, we are already close to 70% or 74% capacity utilization as per our presentation if we take the annualized installed capacity. But yet our realizations have been poorer than the Q4 of FY 2025. So even if we move forward with a higher capacity utilization, how do we plan to improve our realization of Rs. 1 lakh per ton, sir?
Naresh Jalan: No, I think realization also is affected by the commodity price. I think realization is directly linked to the commodity price. And if the whole year as you must have seen that raw material price has continued to decrease. So, with the decreasing trend of raw material pricing vis-à-vis FY25, that is the effect which we have had. In terms of product mix, I think we have had a much better product mix in the second half of the year of this financial year. So, I think we have done much better than what presumably would have been with the current commodity price if the product mix would not have been what it is right now.
Vinil Shah: No, sir, because my confusion was because our export realization has increased from Rs. 1.77 lakhs to Rs. 1.85 lakhs?
Naresh Jalan: Both the things, I think export realizations are always much better. And if you see the previous year, exports were higher than this current financial year as a percentage. So, as the export grows, automatically the overall realization is going to be much better than what it is currently there.
Vinil Shah: Alright Sir. Thank you. That's all from my side.
Moderator: The next question is from Mr. Saket from Sagari Cap.
Saket: So, first question is pertaining to the non-auto order wins. So almost INR250-odd crores order has come from energy segment. So, can you just explain what exactly what kind of order is this within the energy space?
Naresh Jalan: Milesh, can you answer this question, please?
Milesh Gandhi: Basically, as you know, energy storage has become the latest trend with the market. And we have received a lot of orders from companies which are very doing very good in energy space in the North America market. And they have a very ambitious plans with regard to the energy storage devices. And these devices actually require a lot of forgings and castings
Q4 & FY'26 Earnings Conference Call Transcript
RANKRISHNA FÓRGINGS LIMITED
as a mix in order to go forward there. So, we have received a good order book on account of it and that's what we have reflected in the order books.
Saket:
Okay. Thanks for the clarification. So, sir, last time when we talked about the turnaround within the US business, so we talked about largely the new customers or the new wins which were helping us come back slowly on growth. And that also shows up in the numbers, almost Q-on-Q there has been a growth. Now going for FY27, with the tariff behind us now. And as Naresh sir also talked about coming revival of demand as far as Class 8 trucks is concerned. So, do you think FY27 could be a normalized year from a US export or a North America exports standpoint or it would be an even a growth year given that you know Mexico, I think likely to go live in a couple of weeks or couple of months.
Naresh Jalan:
I think it will be a growth year vis-à-vis previous year in terms of our overall North America performance is concerned.
Saket:
That's great to hear, sir. Sir, now another question that I have is pertaining to I think mainly for CFO sir. There is a given in the notes of the results, there has been some loss provisions that we have made vis-à-vis tariffs that some of our customers have had to bear. So can you explain something pertaining to this ECL, what exactly is this?
Lalit Khetan:
See, so we have made a provisioning of ECL for Rs. 42 crores in this quarter as basically this is in light of income of electricity duty which we got order in the last quarter, and the income has been recognized as exceptional income. So, but we did not wanted to carry it into our profit. And so, on a prudent basis considering the current economic scenario and whatever the volatility we have in the global environment, we just provided as ECL on our receivables for this Rs. 42 crores amount. This amount is totally receivable, but still we got this headroom to provide for this. This will help us in future only.
Saket:
Okay, so thanks for the explanation. Now coming back to the shipping time. So how is the shipping time, is it now back to normal especially for our US side or is it still on the higher side and how's the cost now for shipping cost right now?
Naresh Jalan:
Shipping cost has gone up by about 15% to 20% and the days have increased by almost 15 to 20 days.
Saket:
Okay. So, sir, because last time when this happened, a lot of our floating inventory ended up becoming on our books. So right now, how is that floating inventory right now? Is it in line or do you think that should be fine going forward?
Q4 & FY'26 Earnings Conference Call Transcript
RANKRISHNA FORGINGS LIMITED
Naresh Jalan: It is in line.
Saket: Okay. And sir, do we have any West Asia exposure in terms of clientele or revenue?
Naresh Jalan: No, no revenue and no exposure.
Saket: Okay, sir. And thanks. Sir, last question is you have elaborated a bit on the titanium and those kind of alloys where RK Forgings is foraying into and it's good to know because again aerospace is gaining a lot of traction. So, but these are also long gestation period because approval timelines are quite longer.
So, when do we think that this would end up say adding something substantial to our top line or at least will start reflecting say in the order book? So, any sense or colour on that?
Naresh Jalan: I think in terms of order book, I think by this financial year-end, it will start reflecting in our order book. But in terms of our revenue I think it will take additionally 12 to 24 months because these are long lead items to make also and get approvals. So, we are we are not looking anything in terms of our revenue before FY29.
Saket: Okay, sir. Now specifically to the EV segment because it is now kind of making some sort of a comeback, right, both across Europe as well as even US had a reasonable quarter. So now how are those EV focused order or revenue looking up? So, are we looking at say much better contribution from them going forward?
Naresh Jalan: I think EV is performing extremely well for us both in the domestic market and overseas market. And I think as our diversification strategy and as well as our dependence on ICE to decrease the same, we are already working very aggressively to improve our passenger vehicle portfolio which is mainly constituting of EV segments only. So, I think, we have already guided for a 10% revenue in two years' time to come from basically passenger vehicle segment.
Saket: Okay. So, 10% PV is synonymous with 10% EV as an overall level. Is that is it a fair understanding?
Naresh Jalan: Fair understanding.
Saket: Okay, Sir, thanks, Sir, for responding and best of luck for the coming quarters.
Q4 & FY'26 Earnings Conference Call Transcript
Q4 & FY'26 Earnings Conference Call Transcript
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Moderator: Thank you. The next question is from Kiran Garge from Knightstone Capital Management LLP. Please go ahead.
Kiran Garge: How much revenue did we generate from railway assembly undercarriage for the full year?
Naresh Jalan: Can you repeat the question, please.
Kiran Garge: How much revenue did we generate for the railway assemble undercarriage for the full year?
Naresh Jalan: We will not be able to give you exact component by component revenue achievement. But we have achieved a significant portion. Railway business as an overall 7.5% is overall in terms of our railway business which is performing and we are looking at double digit almost to achieve the number by this year from railways.
Kiran Garge: Okay, thank you.
Moderator: Thank you. The next question is from Kiran Naik from Mody Fincap. Please go ahead.
Kiran Naik: Sir, thank you for giving me an opportunity again. Sir, can you tell me from where you are buying aluminium which is your raw material for forging?
Naresh Jalan: We are buying from Hindalco.
Kiran Naik: Hindalco. Only one supplier you have or you import also?
Naresh Jalan: We basically are customer directed buy.
Kiran Naik: Okay, okay. Thanks, Sir. Thank you.
Moderator: Thank you. The next question is from Kunal Bhatia from Dalal and Broacha Stock Broking Limited. Please go ahead.
Kunal Bhatia: Yes, hi, sir. Thank you for the opportunity. Sir, I just had a clarification question. You mentioned that this time around you'll be having almost an 80% utilization on your capacities of 350,000 odd tons. But how what is your say your target which you are expecting in terms of the overall sales volume?
Naresh Jalan: Sales volume I think every quarter-on-quarter you'll see significant improvement. But I think in terms of percentage is very difficult to say. But we are very confident whatever we'll make we'll be able to sell that.
Q4 & FY'26 Earnings Conference Call Transcript
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Kunal Bhatia:
Okay. Sir, because even in the last conference call if I'm not wrong, we had mentioned an upper limit of 10% to 15% kind of growth for FY27 and FY28 in terms of a CAGR?
Naresh Jalan:
I think with the current order book, we are very confident of surpassing. We are not trying to put any number to it right now. But I think with the current geopolitical issue going on, it is a risk also. But with the current order book, we are very confident of growing. So, but with the capacities in place, we are looking at achieving those tonnages in terms of our production plans, and we are very confident to sell those.
Kunal Bhatia:
Okay, okay. So, it's fair to assume that we'll be growing the higher upwards of the 15% number.
Naresh Jalan:
I will not put a number to it, but I think we are looking at a decent and very good growth in FY27.
Kunal Bhatia:
Okay. And sir, ballpark on an 80% kind of utilization levels, what is the kind of leverage in terms of margins that kicks in assuming every other thing remains status quo?
Naresh Jalan:
So, I think the current margin which we have been able to achieve in the fourth quarter, I think now it's here to stay and it we are going to do better margins than what we have achieved right now in this quarter. So, I think as the capacity utilization economics of growth continue to scale and everything remains as where it is and we are able to pass on the energy price increases which have happened
We should be at least 100 to 150 basis points better than what we have done right now. But it all depends on whether we have been we are able to pass on the energy price increases.
Kunal Bhatia:
Okay. Sir, but you would have some fair bit of an idea from your current months' export, say in April, May, have you been able to get those better or a higher realization?
Naresh Jalan:
I think we have not yet been able to pass on the energy price increases. We already are in discussions, and I think discussions are in advanced stage. So, beyond that I think it is very difficult for us to say anything that whether by when we will be able to get. Whatever we will get, we will be able to get from 1st April onwards. But exactly how much and by when, it is very difficult for me to tell, because it is industry-wide which is it is going to happen. It's not going to be happening for us as an isolated case. But whatever the customer approach OEM approach takes, it is to be
Q4 & FY'26 Earnings Conference Call Transcript
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happening in the industry-wide space. So, I think we'll wait for some time before we can comment on it.
Kunal Bhatia:
Okay. And sir, my final question. I am not asking you for a particular number, but in terms of volume on the export basis side, looking at the current situation, how has been say the month of April which is already gone by? Was it better than March?
Naresh Jalan:
I think I will not be able to give you reflect on the anything on the current numbers. But I can only say this year FY27 export volumes are going to come back and it's extremely strong. So, we are very confident of doing much better exports than our previous in terms of overall mix of percentage to sales. We are going to do much better than what we have done in previous years and quarters.
Kunal Bhatia:
Okay, okay. Sounds good. Thank you, Sir. Thank you so much.
Moderator:
Thank you. The next question is from Mr. Kushal from Asian Broking. Please go ahead.
Kushal:
Are there any plans to increase ring rolling capacities?
Naresh Jalan:
No. I think there is no plans right now in this financial year to increase the ring rolling capacity.
Kushal:
Okay, thank you, sir.
Moderator:
Thank you. The next question is from Mr. Aditya Kumar from Old Bridge Mutual Fund. Please go ahead.
Aditya Kumar:
Sir, just one clarification. The orders that you have won of Rs. 323 crores on the CV part, how much of that would be domestic and how much of that would be exports?
Naresh Jalan:
Milesh?
Milesh Gandhi:
You repeat the question please.
Aditya:
Yes. I was asking the Rs. 323 crores order that we have won on the CV side, what would be the split between domestic and exports?
Milesh Gandhi:
Against the Rs. 323 crores, in the CV more than 50% of it is export and around 50% is from the domestic.
Aditya:
Okay, okay. Thank you. That's it.
Q4 & FY'26 Earnings Conference Call Transcript
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Moderator: We have the next question from Mr. Kushal from Asian Broking. Please go ahead.
Kushal: Just again regarding ring-rolling, as I'm seeing here it's at 121% utilization. So, does it affect in any way negatively crossing the capacity.
Naresh Jalan: No. Basically, it is 121%. If you see the history also, ring-rolling has been operating at more than 100% as always and it does not affect in terms of the life of the equipment or in any way.
Kushal: Thank you, sir.
Moderator: Thank you. As there are no further questions in the queue, I now hand the conference over to management for closing comments. Over to you, sir.
Rajesh Mundhra: Thank you. We would like to thank all for taking out the time and joining our earnings call. We hope we have answered all your queries and for your satisfaction. Would like to further inform that get in touch for with us or CDR if you have further information required. We look forward to interacting again next quarter. Thank you again very much for talking to us. Thank you.
Disclaimer: This is a transcript and may contain transcription errors. Certain statements made or discussed on this call may be forward looking in nature and must be viewed in conjunction with the risks and uncertainties that the company faces. The company does not undertake to update these forward-looking statements publicly. Please also note that this document has been edited without changing much of the content, to enhance the clarity of the discussion. No unpublished price sensitive information was shared/discussed on the call.