Ramkrishna Forgings (RKFORGE) Q4 06/07 earnings summary

Executive summary

• FY07 turnover reached Rs.172.22 crore; reported total income was Rs.154.75 crore, PAT Rs.13.88 crore and basic EPS Rs.9.13.

• Growth was supported by higher forging volumes, increased machining and heat-treatment capacity, and movement toward ready-to-use components; the automated ring-rolling line was positioned to further raise output and value addition.

Financial highlights

• Total income rose 57.70% YoY to Rs.154.75 crore; net sales increased 56.09% to Rs.145.18 crore.

• EBITDA increased 51.19% to Rs.28.68 crore; PBT rose 61.72% to Rs.21.09 crore and PAT increased 63.17% to Rs.13.88 crore.

• Cash profit increased 67.57% to Rs.21.45 crore; basic EPS rose from Rs.6.46 to Rs.9.13 and diluted EPS was Rs.9.05.

• Exports grew 46.52% to Rs.13.07 crore; turnover from sales and operating income was Rs.172.22 crore.

Outlook and guidance

• Targeted value-added revenue growth toward Rs.500 crore in FY09, supported by ring rolling, higher realisations and profitability as the facility stabilises.

• Expected to double Rs.170 crore turnover within two years; this is a forward-looking estimate dependent on expansion execution and business conditions.

• Expected commercial-vehicle capacity growth and infrastructure, mining and export demand to support forged-component opportunities; management planned to sustain healthy growth and broaden customers and markets.