Auto ancillary stock jumps 3% after commencing production at its Jharkhand facility

The shares of this auto ancillary stock, primarily engaged in the manufacture and sale of forged components of automobiles, railway wagons & coaches and engineering parts, came into focus on Friday after the company announced capacity addition of 14,250 MTPA.

Stock Performance

With a market capitalization of Rs 14,061.55 crore, the shares went up 3 percent to an intraday high of Rs 805 per share compared to the previous close price of Rs 781.05 per share. The shares retraced from the day’s high and were trading at Rs 776.75, which is a slight decrease when looking at the previous close.

What Happened

Ramkrishna Forgings has commenced commercial production of the “Upsetters” at its Jharkhand facility. This will enhance the company’s production capacity by 14,250 Metric Tons per annum (MTPA).

To finance this expansion, Ramkrishna Forgings has invested around Rs 40.85 crore, funded through a mix of equity and debt, as per its budgeted capital expenditure.

This capacity expansion is part of the company’s long-term strategy to meet the growing demand in the forging business. The overall production capacity of the company now stands at 2,43,400 MT for hot and warm forgings and 25,000 MT for cold forgings.

Company Overview

Ramkrishna Forgings Limited operates primarily in two segments: Forging Components and Others. The Forging components segment produces and sells forged automobile components, sanitization, and cargo business, including services for tours and travels.

Financial Performance

When looking at their financial statements, Ramkrishna Forgings reported a modest 8 percent increase in revenue from Rs 996 crore to Rs 1,074 crore in Q3 FY24-25. This was accompanied by a 15 percent surge in net profits from Rs 87 crore to Rs 100 crore during the same period.

Written by Shwetha Sairam

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