Ramkrishna Forgings Q2 Review - New Order Wins, High Margin Territory To Aid Rerating: Reliance Securities
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Reliance Securities Report
Ramkrishna Forgings Ltd. delivered a strong performance in Q2 FY22, with a historical high Ebitda margin of 24% and profit after tax rising by 24 times YoY to Rs 501 million.
Revenue grew by 129% YoY/39% QoQ to Rs 5.8 billion, on the back of a volume increase of 82% YoY/29% QoQ to 28,279 tonnes, owing to a rise in medium and heavy commercial vehicle sales in the wake of an economic recovery post pandemic and healthy export volumes.
Ebitda increased by 205% YoY to Rs 1.4 billion, while Ebitda margin expanded by 600 basis points YoY to 24% on better operating leverage, despite a 630 basis points QoQ rise in raw material/sales to 45.1%.
Despite a higher input cost, better product-mix with higher exports contribution led to better operating leverage, which benefited Ramkrishna Forgings’ margin.
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