Ramkrishna Forgings (NSEI:RKFORGE) - Share price, News & Analysis

Q: What is the Fair Price of RKFORGE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RKFORGE (₹163.85) is trading above our estimate of [[fair value]] (₹8.53)

RKFORGE fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	0/6
Past Performance	5/6
Financial Health	4/6
Dividends	3/6

RKFORGE Stock Overview

Ramkrishna Forgings Limited manufactures and supplies open and closed die forgings of carbon and alloy steel, micro alloy steel, and stainless steel in India and internationally.

Rewards

Price-To-Earnings ratio (13.2x) is below the Indian market (20.5x)

Earnings grew by 858.1% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 0.49% is not well covered by earnings

Ramkrishna Forgings Competitors

Maithan Alloys

BSE:590078

₹24.6b

Jindal Saw

BSE:500378

₹25.6b

Tata Metaliks

BSE:513434

₹21.5b

Mishra Dhatu Nigam

NSEI:MIDHANI

₹30.8b

Price History & Performance

Summary of all time highs, changes and price drops for Ramkrishna Forgings
Historical stock prices
Current Share Price	₹163.85
52 Week High	₹252.00
52 Week Low	₹130.20
Beta	1.11
1 Month Change	-1.03%
3 Month Change	4.10%
1 Year Change	23.58%
3 Year Change	71.25%
5 Year Change	52.97%
Change since IPO	2,039.03%

Recent News & Updates

Jun 28

Ramkrishna Forgings (NSE:RKFORGE) Is Experiencing Growth In Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. In a perfect world, we'd like to see...

Shareholder Returns

	RKFORGE	IN Metals and Mining	IN Market
7D	9.8%	5.3%	3.0%
1Y	23.6%	-17.4%	0.3%

Return vs Industry: RKFORGE exceeded the Indian Metals and Mining industry which returned -17.4% over the past year.

Return vs Market: RKFORGE exceeded the Indian Market which returned 0.6% over the past year.

Price Volatility

Is RKFORGE's price volatile compared to industry and market?
RKFORGE volatility
RKFORGE Average Weekly Movement	6.6%
Metals and Mining Industry Average Movement	7.7%
Market Average Movement	7.0%
10% most volatile stocks in IN Market	9.9%
10% least volatile stocks in IN Market	4.5%

Stable Share Price: RKFORGE is not significantly more volatile than the rest of Indian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: RKFORGE's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1981	1,896	Naresh Jalan	https://www.ramkrishnaforgings.com

Ramkrishna Forgings Limited manufactures and supplies open and closed die forgings of carbon and alloy steel, micro alloy steel, and stainless steel in India and internationally. It operates in two segments, Forging Components and Others. The company offers crown wheels/ring gears; I beams, crankshafts, connecting rods, knuckles, diff cases, center wedges, steering arms, tie rod arms, pitman arms, stub axles, recondition taper stationary plates, spides/crosses, brake flanges, brackets, wheel hubs, yokes, front engine mounting arms, tooth products, hammer bars, track links, bearing caps, counterweights, and ring gear carriers; and pinions, front hubs, prop shafts, counter shafts, rear axle shafts, coupling flanges, engaging gears, CM gears, speed gears, and clutch collars.

Ramkrishna Forgings Fundamentals Summary

How do Ramkrishna Forgings's earnings and revenue compare to its market cap?
RKFORGE fundamental statistics
Market Cap	₹26.16b
Earnings (TTM)	₹1.98b
Revenue (TTM)	₹23.20b

13.2x

P/E Ratio

1.1x

P/S Ratio

Is RKFORGE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RKFORGE income statement (TTM)
Revenue	₹23.20b
Cost of Revenue	₹13.13b
Gross Profit	₹10.07b
Other Expenses	₹8.09b
Earnings	₹1.98b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	12.38
Gross Margin	43.41%
Net Profit Margin	8.53%
Debt/Equity Ratio	147.5%

How did RKFORGE perform over the long term?

See historical performance and comparison

Dividends

0.5%

Current Dividend Yield

4%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RKFORGE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RKFORGE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RKFORGE. This is calculated by dividing RKFORGE's market cap by their current preferred multiple.
What is RKFORGE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹26.16b

RKFORGE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.8x
Enterprise Value/EBITDA	8x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does RKFORGE's PE Ratio compare to its peers?

RKFORGE PE Ratio vs Peers

The above table shows the PE ratio for RKFORGE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.9x
590078 Maithan Alloys	3x	n/a	₹24.6b
500378 Jindal Saw	6.2x	25.7%	₹25.6b
513434 Tata Metaliks	9x	n/a	₹21.5b
MIDHANI Mishra Dhatu Nigam	17.5x	n/a	₹30.8b
RKFORGE Ramkrishna Forgings	13.2x	n/a	₹26.2b

Forward PE

Price-To-Earnings vs Peers: RKFORGE is expensive based on its Price-To-Earnings Ratio (13.2x) compared to the peer average (8.9x).

Price to Earnings Ratio vs Industry

How does RKFORGE's PE Ratio compare vs other companies in the IN Metals and Mining Industry?

Price-To-Earnings vs Industry: RKFORGE is expensive based on its Price-To-Earnings Ratio (13.2x) compared to the Indian Metals and Mining industry average (12.4x)

Price to Earnings Ratio vs Fair Ratio

What is RKFORGE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RKFORGE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate RKFORGE's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of RKFORGE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RKFORGE (₹163.85) is trading above our estimate of fair value (₹8.53)

Significantly Below Fair Value: RKFORGE is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RKFORGE's PEG Ratio to determine if it is good value.

Discover undervalued companies

Future Growth

How is Ramkrishna Forgings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-13.1%

Forecasted Materials industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Ramkrishna Forgings has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Discover growth companies

Check out Ramkrishna Forgings's track record over time to understand how much the company has returned to shareholders and its earnings growth rate in the past.
Ramkrishna Forgings competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has Ramkrishna Forgings performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RKFORGE has high quality earnings.

Growing Profit Margin: RKFORGE's current net profit margins (8.5%) are higher than last year (1.6%).

Past Earnings Growth Analysis

Earnings Trend: RKFORGE's earnings have grown by 16.8% per year over the past 5 years.

Accelerating Growth: RKFORGE's earnings growth over the past year (858.1%) exceeds its 5-year average (16.8% per year).

Earnings vs Industry: RKFORGE earnings growth over the past year (858.1%) exceeded the Metals and Mining industry 76.9%.

Return on Equity

High ROE: RKFORGE's Return on Equity (18.4%) is considered low.

Discover strong past performing companies

Financial Health

How is Ramkrishna Forgings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RKFORGE's short term assets (₹18.1B) exceed its short term liabilities (₹14.2B).

Long Term Liabilities: RKFORGE's short term assets (₹18.1B) exceed its long term liabilities (₹9.8B).

Debt to Equity History and Analysis

Debt Level: RKFORGE's net debt to equity ratio (138.9%) is considered high.

Reducing Debt: RKFORGE's debt to equity ratio has reduced from 203.9% to 147.5% over the past 5 years.

Debt Coverage: RKFORGE's debt is not well covered by operating cash flow (2.7%).

Interest Coverage: RKFORGE's interest payments on its debt are well covered by EBIT (3.6x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Ramkrishna Forgings's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.49%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RKFORGE's dividend (0.49%) is higher than the bottom 25% of dividend payers in the Indian market (0.43%).

High Dividend: RKFORGE's dividend (0.49%) is low compared to the top 25% of dividend payers in the Indian market (1.85%).

Stability and Growth of Payments

Stable Dividend: RKFORGE's dividend payments have been volatile in the past 10 years.

Growing Dividend: RKFORGE's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (4%), RKFORGE's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: RKFORGE is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

9.9yrs

Average management tenure

CEO

Naresh Jalan (46 yo)

15.58yrs

Tenure

₹17,865,000

Compensation

Mr. Naresh Jalan has been Managing Director of Ramkrishna Forgings Limited since November 5, 2006 and serves as its Executive Director. He has done MBA.

CEO Compensation Analysis

Compensation vs Market: Naresh's total compensation ($USD226.12K) is about average for companies of similar size in the Indian market ($USD260.10K).

Compensation vs Earnings: Naresh's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: RKFORGE's management team is seasoned and experienced (9.9 years average tenure).

Board Members

Experienced Board: RKFORGE's board of directors are considered experienced (9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31