RKFORGE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.4

📊 Core Financials Analysis

Profitability

ROE: 10.9% and ROCE: 6.52% — moderate, but below ideal for capital-intensive manufacturing.

EPS: ₹23.6 — decent, though recent PAT dropped sharply from ₹208 Cr to ₹21.5 Cr, indicating significant earnings volatility.

Quarterly Profit Variation: −49.4% — a red flag for short-term performance.

Balance Sheet & Cash Flow

Debt-to-equity: 0.55 — moderate leverage, manageable but worth monitoring.

Dividend Yield: 0.35% — modest, not a major draw for income investors.

Cash flows may be under pressure due to cyclical demand and margin compression.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 30.2 Slightly above industry average (29.1)

P/B Ratio ~3.48 Reasonable given current ROE

PEG Ratio 2.15 Overvalued relative to growth

Intrinsic Value ₹520–₹540 (est.) Current price ~5–10% above fair value

🧠 Business Model & Competitive Edge

Company Profile: Ramkrishna Forgings Ltd (RKFORGE) is a leading manufacturer of forged components for automotive, railways, and industrial sectors, with a strong export footprint.

Strengths

Diversified customer base across domestic and international OEMs.

Technological capabilities in closed-die and ring rolling forgings.

Challenges

High earnings volatility and margin pressure.

Recent drop in institutional holdings (DII −2.40%) suggests cautious sentiment.

RSI and MACD indicate weak technical momentum.

📈 Technical & Sentiment Overview

RSI: 46.7 — neutral zone, no strong momentum.

MACD: −3.52 — bearish crossover, short-term weakness.

DMA 50 & 200: Price below both — confirms downtrend.

Volume: Above average — active trading interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹520–₹540 — near intrinsic value and technical support.

Holding Strategy

Suitable for long-term investors seeking exposure to industrial manufacturing and export-driven growth.

Price targets for FY26 range from ₹793 to ₹1,350; long-term targets for FY30 could reach ₹1,750+ under bullish conditions

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Monitor order book strength, export demand, and margin recovery.

RKFORGE is a cyclical industrial play with solid fundamentals but current valuation and earnings softness suggest a staggered accumulation approach. You can explore deeper insights on Trendlyne’s RKFORGE dashboard or review long-term forecasts on Daily Bulls’ RKFORGE analysis

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