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00:00 Hi, good morning and welcome to NDTV Profit.

00:08 We are joined by Mr. Narendra Jalan right now, the Managing Director of Ram Krishna

00:12 Forging.

00:13 We are discussing the back of the quarter 4 earnings which were reported by the company

00:18 and a strong show shown by…

00:22 Currently the company showed a really strong revenue growth of roughly 15 to 20% while

00:28 on EBITDA and here was the key numbers of roughly 22% the company has clocked in.

00:34 It has maintained margins as well coming at a roughly 200 crores of EBITDA while PAT was

00:40 up roughly 31% compared to the previous year coming at a roughly 87 crores.

00:45 Now do know that the company has been in the news on the back of mergers of its subsidiary

00:50 with itself while it has also you know put up a new facility in Mexico.

00:57 So we will be talking about all of this and more with the management and with Mr. Narendra

01:04 Jalan.

01:05 I will just check if the guest is already logged in.

01:08 Yes, hello Mr. Jalan, good morning and thank you so much for joining in today.

01:14 Let me just start off with the numbers.

01:18 The strong EBITDA profile maintained by the company, could you just run us through the

01:23 basics of how Q4 panned out and what is your expectation for financial year 2025 if not

01:31 on numbers just how you are seeing the industry as well.

01:35 I think Q4 has been extremely strong in the backdrop of the geopolitical issues as well

01:40 as the domestic commercial vehicle downturn and going forward I think we expect to at

01:48 least have a 15 to 20% volume growth going forward into FY25.

01:55 Got it sir.

01:56 And you have in this particular, I wanted to start off with talking about the Vande

02:03 Bharat order also that you received in this particular quarter.

02:07 Is this part of the JV with Titagrad and if there is any commentary on how do you see

02:13 the JV with Titagrad also panning out going forward as well?

02:17 I think the Vande Bharat order is not a part of JV.

02:21 It is our own RKFL standalone basis, the manufacturing of the underframe which we have received from

02:27 DHL.

02:28 DHL is under consortium with Titagrad but this is the order has been received on a standalone

02:35 basis and the joint venture which we have with Titagrad which is known as RKTR is the

02:42 wheel project which is being set up in Chennai.

02:46 And is the investment of this particular green project already complete or is it ongoing

02:50 in this particular financial year as well because I know that the company in its presentation

02:54 has given a detailed guidance on investment going forward as well as the CAPEX plan.

02:58 So is this going forward, is this completed or is it going to be some component as part

03:03 of the investments as well as financial year 25?

03:06 This is part of our investment and I think we have mentioned in our presentation.

03:11 Last year we have invested close to 62 crores in this investment and total we invested around

03:16 240 crores of investment in this going into next two years as a part of equity and balance

03:25 is going to be funded by Titagrad and as well as debt for completion of the project.

03:31 And do you expect any such more orders also coming in from the Bhandevaras segment for

03:38 Ramkrishna Forging on a standalone basis as well?

03:41 Yes, I think the current order which we have received is only for 32 train sets.

03:46 Correct.

03:47 Total private sector order is close to 200 train sets.

03:50 So we have in October we will submit the samples for validation and we hope that once the validation

03:58 is complete we will have an opportunity to service the industry for entire 200 train

04:05 sets.

04:06 Understood sir.

04:07 And what is the kind of competition that you are seeing in this segment?

04:10 Do you see other forging players in this segment or is there any other players who service

04:17 in the auto industry who also compete in this particular order?

04:20 No, I think none of the people in the auto segment compete in this order.

04:25 I think there are other people who are there in this segment but they are not part of the

04:30 auto industry.

04:31 Understood sir.

04:32 Now I just wanted to take some, move a little bit global.

04:37 I think the share of revenue I think between Asia is roughly around 59 to 60% as well as

04:44 North America and Europe is also a substantial share.

04:49 The companies also put in a new plant in Mexico in this particular financial year.

04:53 I just wanted to ask firstly will you be servicing a lot of North American clients from this

04:58 Mexico plant and over the next one to two years where do you see the share of revenue

05:04 of North America as well as Europe move from here?

05:09 I think this Mexico facility is not yet set up.

05:11 It is in process and I think in next three, four months the setup is going to start and

05:16 I think we are looking at almost only 8 to 10 crores of revenue from this plant.

05:23 But next year in FY26 we are looking at significant revenue and this facility is primarily being

05:28 put to cater to the passenger vehicle and the local manufacturing out of North America.

05:36 Understood sir.

05:38 And could you also just brief us about what are the EV plans the company has been doing?

05:43 I think you had mentioned in last year that if I am pronouncing it correct you had a 51%

05:50 stake in Suyo.

05:52 Apart from that and including this if you could just summarize what the company is doing

05:57 on the EV front.

05:58 We have seen a lot of auto component makers starting making parts already and putting

06:03 in the EV plants.

06:06 For Ramkrishna as well as for the industry how do you see with the evolving landscape

06:10 of electric vehicles for passenger vehicles as well as two wheelers if anything.

06:16 Could you just guide us on that as well?

06:18 In EV we are migrating slowly but steadily into EV and I think we are looking at in next

06:25 three years a double digit growth from EV in our balance sheet and primarily driven

06:30 by two wheeler and four wheeler market.

06:34 And some part of it is going to be from the light commercial vehicle.

06:38 So we are building up a pipeline of autos and I think you will be able to see this in

06:43 coming quarters and months how this shapes up.

06:49 And I think you had mentioned that the equity commitment for Tata Guard over the next three

06:54 years from 64 crores to 100 to 113 crores as well.

06:59 Could you talk a little bit about the kind of orders that you are going to go for here

07:03 and any kind of if not quantification how do you see this space evolving?

07:09 Could you let us know a little bit about that as well?

07:12 In the wheels project we have already backed an order from Indian Railways.

07:16 Yeah correct.

07:17 Churning of 80,000 wheels per annum and they said take up a kind of agreement with the

07:23 railways up to 2047.

07:25 While it is only 80,000 wheels which railway has guaranteed but with the infrastructure

07:30 growth and the railway investments in modernizing railways we feel that there is going to be

07:37 huge domestic opportunities in the wheel project as well as there is a huge opportunity globally

07:43 also.

07:44 But right now we are not filling in any orders because this project is going to be up in

07:50 production by end of FY26.

07:53 So we would wait for right opportunity time to start filling up the orders.

07:59 Our first and foremost want is to start manufacturing and delivering wheels to Indian Railways.

08:06 And so just one quick 20 second answer if you can squeeze in.

08:09 You had a QIP which you raised for 1000 crores.

08:13 You have informed the exchanges of utilization of this and I am guessing this is for the

08:16 pairing down of debt.

08:19 How quickly do you see over the next few months or the next quarters to finish pairing down

08:25 the debt and what is the kind of timeline for this if anything?

08:31 I think we have already given a detailed statement of the cash flow in our presentation which

08:36 clearly states the current debt status and what is going to be likely in FY25 and FY26.

08:45 So our statement in the presentation is extremely clear in terms of the overall debt management

08:51 and the utilization of the QIP proceeds.

08:53 So no other fund raise over at least FY26 on the equity side?

08:59 I think we are not looking at any fund raise with the current cash flows.

09:03 Alright sir.

09:04 Alright sir, thank you so much for joining in today and running us through all your numbers

09:08 and being so upfront with all the answers.

09:11 We will be talking to you soon as well as for the next quarter as well.

09:16 Thank you so much for joining in today.

09:20 This is time for a quick break here.

09:22 We will be back with a lot more.

09:25 Stay tuned to NET Profit.

09:26 Thank you.

09:29 [inaudible].

Rk Forgings' FY25 Order Pipeline | NDTV Profit

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