We are NEUTRAL on RK Forgings (1) While the CV segment outlook is mixed, diversification initiatives will de-risk the business model. The expected acquisition of ACIL will provide access to tractor/2W customers (2) The co is sustaining market share in the domestic segment, amidst a sedate demand environment. In 2QFY20, RK Forgings EBITDA margin at 18.1% (-90bps YoY) continued to be impacted by a weak demand environment. The co is diversifying beyond CVs through expansion into new segments/inorganic initiatives. We recently upgraded the stock to NEUTRAL post the sharp stock correction and the risk-reward is more favourable. We are lowering estimates by ~2% and set a revised TP of Rs 275 (@12x Sep-21 EPS).