Ramkrishna Forgings (RKFORGE) Q4 10/11 earnings summary

Executive summary

• FY11 delivered strong growth: net sales rose 43.77% to ₹409.69 crore, EBITDA increased 57.98% to ₹70.41 crore and PAT grew 102.57% to ₹22.06 crore.

• Higher forging productivity, improved ring-rolling utilization and export sales supported performance; capital investment expanded forging and machining capacity.

Financial highlights

• Net sales increased 43.77% YoY to ₹40,968.61 lakh; sales and operating income, before excise duty, was ₹44,537.75 lakh.

• EBITDA increased 57.98% to ₹7,040.78 lakh; PBT rose 103.86% to ₹3,331.43 lakh and PAT increased 102.57% to ₹2,205.93 lakh.

• Cash profit rose 62.72% to ₹4,779.45 lakh; net exports increased 211.50% to ₹4,994 lakh.

• Basic EPS was ₹13.43 versus ₹7.05; diluted EPS was ₹13.06 versus ₹7.01.

Outlook and guidance

• Outlook was positive, with automotive outsourcing, infrastructure investment and low vehicle penetration seen as potential drivers of forging and commercial-vehicle demand.

• Commercial-vehicle growth prospects were conditional on continued availability of affordable financing; higher fuel costs and inflation were identified as sector concerns.

• Planned energy-efficiency work included converting existing oil-fired furnaces to induction furnaces to lower fuel and production costs.