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Full Earnings Call Transcript (Audio) for Ramkrishna Forgings (RK Forge) - Q3FY20
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- Q3 has been a difficult one for RK Forge. While revenues and net profits fell management said raw material prices have fallen and cost saving efforts are being implemented. Believe "worst is behind us", and expecting recovery in coming quarters.
- Management expecting exports to drive growth in coming quarters. But expecting Q4 to be similar to Q3 in targets for export.
- By FY21 will achieve full volume of orderss in pipeline. FY20 will achieve $1 million worth of orders.
- Amtek Auto acquisition is pending approval with NCLT. Expecting approval to come within one month time. Payment of Rs. 85 crore upfront for this business, with a total of Rs. 110 crore over five years. Management expecting Rs. 7-800 crore from the business post optmization.
- The company has Rs. 930 crore of debt as of end December.
- Planning to fundraise through SPV for additional investments.
- Converting customers in Europe is months away due to conversion time periods. Expect new European customers in FY21. Expecting addition of topline from new Europe customers and component sales in the US market in FY21.