Ramkrishna Forgings (RKFORGE) Q4 09/10 earnings summary

Executive summary

• FY2010 net turnover rose 24.44% to Rs. 284.96 crore; EBITDA increased 23.50% to Rs. 44.57 crore and PAT rose 139.87% to Rs. 10.89 crore.

• Higher forging output and a recovery in ring rolling supported growth, while exports remained subdued and the business continued to rely primarily on commercial vehicles.

Financial highlights

• Net sales and operating revenue reached Rs. 284.96 crore, up 24.44% YoY; other income was Rs. 0.91 crore.

• EBITDA was Rs. 44.57 crore, up 23.50%; PBT rose 121.54% to Rs. 16.35 crore and PAT rose 139.87% to Rs. 10.89 crore.

• Cash profit increased 61.55% to Rs. 29.37 crore; basic EPS was Rs. 7.05 versus Rs. 2.96 and diluted EPS was Rs. 7.01 versus Rs. 2.53.

• Operating cash flow was Rs. 20.86 crore; investing outflow was Rs. 31.48 crore and financing inflow was Rs. 1.44 crore, leaving cash and cash equivalents of Rs. 0.64 crore.

Outlook and guidance

• Management expected low vehicle penetration and infrastructure investment to support potential double-digit CV growth next year, conditional on affordable financing remaining available.

• Export ramp-up was expected after ties with Latin American customers, with a stated focus on Latin America and the USA.

• Railway wagon, coach and axle projects were identified as potential demand opportunities for forgings.