Ramkrishna Forgings, an under the radar stock until recently, has seen a surge in share price in recent weeks on strong September quarter results and optimistic projections. The firm is gaining market share in both exports and domestic volumes - the management is eyeing a higher share of exports, increasing it from 30% to 40% by the first quarter of the next financial year. That, compounded with bullishness about margins - the company says they have enough demand to pass on raw material price increases to consumers - suggests that the balance sheet is set to remain strong in the coming quarters for the firm.
Analysts like HDFSec have been especially bullish on RKForge, citing improved earnings and cash flows, and strong return ratios. For the first half of FY18 Ramkrishna's revenues were up 58% YoY, bringing it to Rs 590 crore. Margins were also up up at 19.6% versus 18.9% the same period last year. The company is sitting on a comfortable situation in terms of cash reserves, and the management recently indicated that it is not averse to looking at stressed assets in other firms, in case there is a deal available at a competitive price. The firm's focus is currently growth in terms of content per vehicle as well as capacity expansion, making it a stock to watch out for as it moves into a "scale up" phase to drive growth in export as well as domestic markets.