Ramkrishna Forgings Ltd.
ISIN: INE399G01023 • Market Cap: ₹13,629 Cr
The 5-Pillar Quality Audit for Ramkrishna Forgings Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (16.1%), Return on Capital Employed (6.5%), and equity compounding (2.2%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.73 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (3.9%) and 3Y PAT CAGR (-29.7%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 127.50 vs PEG of 2.11 and Dividend Yield of 0.1%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 43.4%, backed by 25.5% institutional ownership.
Key Fundamental Strengths
Deep Institutional Sponsorship (25.5%)
Mutual funds, domestic DIIs, and foreign FIIs hold 25.5%, providing strong governance scrutiny.
Consistent Market Standing (Mid Cap)
Established player in the Automobile and Auto Components sector with an overall fundamental quality score of 49/100.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 6.5%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Topline Stagnation (3Y Sales CAGR: 3.9%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Priced for Perfection (P/E: 127.50)
A steep valuation multiple of 127.50 leaves little margin for safety against quarterly earnings misses.
Quantitative Strategy Eligibility
Checking RKFORGE against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 49/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Automobile and Auto Components Sector Peer Comparison
Compare RKFORGE directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Ramkrishna Forgings Ltd. (RKFORGE)Current | 49/100 | ₹13,629 Cr | 127.50 | 6.5% | 0.73 | — |
| Maruti Suzuki India Ltd. (MARUTI) | 71/100 | ₹4.30 Lakh Cr | 30.02 | 15.6% | 0.00 | View |
| Mahindra & Mahindra Ltd. (M&M) | 72/100 | ₹4.24 Lakh Cr | 22.97 | 16.6% | 1.43 | View |
| Bajaj Auto Ltd. (BAJAJ-AUTO) | 77/100 | ₹3.22 Lakh Cr | 27.34 | 25.4% | 0.57 | View |
| Eicher Motors Ltd. (EICHERMOT) | 74/100 | ₹2.19 Lakh Cr | 37.86 | 23.7% | 0.01 | View |
| TVS Motor Company Ltd. (TVSMOTOR) | 68/100 | ₹2.07 Lakh Cr | 60.46 | 29.9% | 3.31 | View |
Frequently Asked Questions: Ramkrishna Forgings Ltd.
Q:What is the 5-Pillar Fundamental Score for Ramkrishna Forgings Ltd. (RKFORGE)?
Ramkrishna Forgings Ltd. has a RupeeTools Fundamental Score of 49/100, placing it in the 'Caution / Risky' category. Its pillar scores are: Profitability (43/100), Financial Health (66/100), Growth (28/100), Valuation (38/100), and Ownership Quality (70/100).
Q:Is RKFORGE fundamentally strong for long-term investment?
RKFORGE currently holds a moderate quality rating of 49/100. While it operates in the Automobile and Auto Components sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does RKFORGE pass the Coffee Can Investing filter?
No. RKFORGE does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does RKFORGE compare against other Automobile and Auto Components peers?
Within India's Automobile and Auto Components sector, RKFORGE trades at a P/E of 127.50 and generates an ROCE of 6.5%. Compare its 5-Pillar score of 49/100 against top sector peers like Maruti Suzuki India Ltd. (71/100), Mahindra & Mahindra Ltd. (72/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.