RKFORGE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Rating: 3.7

📈 Financial Health Check

Quarterly Performance

PAT Qtr: ₹200 Cr vs ₹20.9 Cr Prev — massive profit surge (206%) likely due to one-off gains or turnaround; warrants deeper inspection.

EPS: ₹22.9 — attractive earnings for midcap status.

Return Metrics

ROE: 11.6% and ROCE: 6.93% — decent but not industry-leading; indicates scope for margin improvement.

Leverage

Debt-to-Equity: 0.70 — relatively high, but manageable if cash flows continue strengthening.

💰 Valuation Landscape

Metric Value Commentary

P/E Ratio 32.7 In line with industry PE (31.2) — fair valuation

P/B Ratio ~3.56 Reflects premium to book; not excessive for manufacturing

PEG Ratio 1.74 Above ideal, but earnings spike may compress this soon

RSI 32.7 Near oversold territory — potential value zone

MACD –9.75 Bearish divergence — caution on short-term trend

Price vs DMA ₹599 vs DMA50 ₹647 / DMA200 ₹725 Below both averages — recovery may take time

52W Index: 9.09% — trading near lows despite strong Qtr results; suggests disconnect between fundamentals and sentiment.

Volume Spike: Well above average — likely post-results or driven by bargain hunting.

FII/DII Activity

FII: –0.03%, DII: –2.40% — institutions cutting exposure, possibly fearing cyclical volatility.

🏭 Business Model & Competitive Insight

Sector: Auto components & forging — highly cyclical, but benefits from automotive and infra boom.

Moat

Strong OEM tie-ups, precision forging expertise.

Export potential gives revenue diversification.

Watchpoints

Debt servicing amidst sector downturns.

Sensitivity to raw material inflation and demand cycles.

🎯 Investment Strategy

Suggested Entry Zone: ₹565–₹585 — technical support zone with earnings momentum backing.

Holding Outlook

Short-Term: Volatile, potentially reactive to policy changes and macro cues.

Long-Term: Viable compounder with upside if margin improvement sustains and debt reduces.

Monitor sustainability of profit spike and capacity utilization metrics going forward.

Want me to run a comparative breakdown vs Bharat Forge or Ramkrishna Forgings to explore valuation gaps, export strategies, and margin differentials? Could make for a powerful decision-making lens.

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