Ramkrishna Forgings (RKFORGE) Q4 12/13 earnings summary

Executive summary

• FY13 net sales fell 19.42% YoY to ₹403.90 Cr, EBITDA fell 24.54% to ₹61.65 Cr and PAT fell 54.58% to ₹11.03 Cr amid weak commercial-vehicle demand.

• Export revenue grew 17.30% to ₹54.39 Cr despite weakness in North American and European markets; new overseas customers and a US representative office support further growth.

Financial highlights

• Revenue from operations, net of excise, was ₹40,389.70 lakh versus ₹50,126.29 lakh in FY12; total revenue was ₹40,522.67 lakh.

• PBT was ₹1,860.40 lakh versus ₹3,584.52 lakh; PAT was ₹1,102.88 lakh versus ₹2,428.92 lakh.

• Finance costs rose to ₹2,042.48 lakh from ₹1,878.89 lakh; depreciation and amortization decreased to ₹2,262.21 lakh from ₹2,706.74 lakh.

• Cash profit fell 23.01% to ₹40.19 Cr; operating cash flow was negative ₹5,848.66 lakh, reflecting working-capital movements.

Outlook and guidance

• Management expected FY14 prospects to improve, with recovery after the first two quarters as macro conditions, interest rates and consumer confidence improve; demand sustainability remains tied to investment sentiment.

• Industry outlook cited expected Indian CV sales CAGR of 15% over five years, from 0.8 million units in FY12 to 1.6 million by FY17.

• Commercial production from the new 12,500-ton press line was expected to begin in September 2014.