Ramkrishna Forgings (RKFORGE) Q4 07/08 earnings summary

Executive summary

• FY08 operating income rose 37.08% to Rs. 236.08 crore, while PAT fell 6.06% to Rs. 13.03 crore as higher interest and depreciation costs, plus ring-rolling ramp-up, weighed on profit.

• Full-year benefits from the stabilized ring-rolling line were expected in FY09; management targeted growth above 50%.

Financial highlights

• EBITDA increased 38% to Rs. 39.67 crore from Rs. 28.68 crore; PBT declined 4% to Rs. 20.26 crore from Rs. 21.12 crore.

• Basic EPS decreased to Rs. 8.53 from Rs. 9.13; diluted EPS was Rs. 8.49 versus Rs. 9.05.

• Export sales rose 46.67% to Rs. 19.30 crore from Rs. 13.07 crore.

Outlook and guidance

• FY09 growth target exceeded 50%, supported by full-year ring-rolling operations, export expansion and customer-base diversification.

• Planned balancing investments included CNC shaving, shaping and hobbing machines, Doosan machining centres, Fanuc drilling machines and a billet-cutting machine.

• Priorities included higher capacity utilization, productivity, lower consumption and improved efficiency across existing facilities.