Ramkrishna Forgings Ltd Management Discussions

Global Economy

In 2024, the global economy exhibited resilience despite persistent uncertainties. The estimated global Gross Domestic Product (GDP) was approximately US$ 115.49 Trillion. The International Monetary Fund (IMF) projected a global economic growth rate of 3.3% for 2024. After experiencing significant volatility during FY 2022–2023, characterised by inflationary pressures, tightening monetary policies and geopolitical tensions, 2024 saw gradual stabilisation across major economies. Nonetheless, economic growth varied across regions, influenced by policy adjustments, demographic changes, technological advancements and ongoing conflicts.

The global economy is currently navigating a period of significant transition, characterised by a recalibration of established economic norms and the emergence of new, yet undefined rules. A notable surge in tariff announcements by the United States of America, coupled with retaliatory measures from key trading partners, has introduced a heightened degree of policy unpredictability and uncertainty into the global economic landscape. In light of the escalating trade tensions, the International Monetary Fund (IMF) foresees a moderation in global economic growth. The latest forecasts indicate that global growth is expected to decelerate to 2.8% this year and 3.0% in the upcoming year. This deceleration can primarily be attributed to the aforementioned trade disputes, which have created substantial impediments to economic expansion.

Notwithstanding these challenges, it is imperative to acknowledge that global growth, despite its moderation, continues to exceed levels typically associated with recessionary conditions. Moreover, global trade has exhibited a notable degree of resilience, as businesses have adeptly adjusted to the changing environment by strategically altering trade flows.

Sources: IMF https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ ADVEC/WEOWORLD/AFQ https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era

Indian Economy

The Indian economy continued to exhibit resilience and growth. According to the Economic Survey 2025, Indias real GDP growth is anticipated to be 6.4% for FY25, closely aligning with the decadal average. Improvements across various sectors, coupled with strategic government initiatives, have bolstered this growth.

Inflation trends indicate a positive trajectory. Retail headline inflation has decreased to 4.9%; however, food inflation continues to be a concern at 8.4%. The Economic Survey predicts that Indias inflation is on track to align with the targets set by the Reserve Bank of India (RBI) and the International Monetary Fund (IMF), aiming for approximately 4% by FY26.

Foreign investment inflows have maintained robustness, evidenced by an increase in Gross Foreign Direct Investment. Additionally, Indias foreign exchange reserves have exhibited some fluctuations, mirroring global economic dynamics.

A significant highlight of the Fiscal Year 2024-25 was the increase in tax revenues. Gross tax collections experienced substantial growth, indicating the fundamental strength of the economy and enhanced compliance. Goods and Services Tax (GST) collections totalled _1.96 Lakhs Crores, driven by increased consumption, robust supply chain efficiencies and the expansion of the formal sector. The governments focus on infrastructure development is evident in the substantial increase in spending. Significant investments have been directed toward enhancing ports, shipping capabilities and expanding the renewable energy sector. Additionally, social sector expenditures have grown, concentrating on improving education, healthcare, and rural connectivity.

Outlook

Indias economy is expected to maintain strong momentum through 2026, supported by robust domestic demand, structural reforms, and proactive fiscal and monetary policies. According to the International Monetary Fund (IMF), Indias GDP is projected to grow at around 6.3% in 2026. This growth trajectory is expected to be driven by resilient private consumption, rising public capital expenditure, and ongoing improvements in infrastructure and digital connectivity.

Looking toward 2030, India is poised to emerge as a global economic powerhouse, potentially becoming the worlds third-largest economy in nominal GDP terms, behind only the U.S. and China. S&P Global projects that

Indias economy will grow at an average annual rate of 6.7% through the latter half of the decade. This sustained growth will be powered by a favourable demographic profile, a rising middle class, and continued policy support for infrastructure development, digital innovation, and manufacturing expansion.

Indian Forging Sector

The Indian forging sector constitutes a fundamental pillar of the nations manufacturing landscape, supplying critical components for a wide array of industries, including automotive, railways, defence, aerospace, power generation, construction, and mining. Significantly, India ranks as the third-largest casting producer globally, underscoring the considerable potential and existing capacity within the overarching metal forming industry that the forging sector is poised to capitalise upon.

Several factors are contributing to the growth of the Indian forging sector. The expansion of Indias automotive industry, currently the fourth largest in the world, serves as a primary catalyst, generating significant demand for forged components. Furthermore, Indias rising stature as a global

Sectoral Performance Highlights

In terms of sectoral performance, the Indian economy illustrates a well-balanced growth outlook. The agricultural sector is projected to achieve a growth rate of 3.8%, while the industrial sector is anticipated to expand by 6.2%. Furthermore, the services sector is expected to serve as the primary catalyst for growth, with an estimated growth rate of 7.2%.

automotive manufacturing hub enhances this necessity, particularly concerning high-quality and durable parts. The prevailing trend towards lighter and more fuel-efficient vehicles further drives the demand for high-strength forged materials such as aluminium and specialised steels. Moreover, the governments continued aggression on infrastructure development has resulted in heightened demand for forged components utilised in construction and heavy machinery. The rapidly expanding aerospace and defence sectors in India are also making a significant contribution, as the demand for forged parts rises, bolstered by initiatives such as "Make in India" and increasing defence investments directed towards achieving self-reliance. The growing emphasis on domestic defence production decreases reliance on imports and stimulates local forging manufacturing.

Parallelly, the expansion of civil aviation propels the demand for lightweight, high-strength forged materials essential for aircraft manufacturing. The comprehensive "Make in India" initiative acts as a catalyst by fostering domestic manufacturing, improving infrastructure and promoting overall industrial growth, thereby offering a substantial impetus to both the forging and casting industries. Furthermore, India is progressively emerging as a prominent exporter of forged products, bolstered by the growth of domestic manufacturing capabilities and increased competitiveness.

The implementation of advanced technologies, including CNC machines, automation, and precision forging techniques, significantly enhances the production of accurate and intricate forged components. Recognising the cyclical nature of the automotive sector, forging companies are strategically broadening their focus into non-automotive sectors such as aerospace, defence, railways, agriculture and power generation to facilitate more balanced growth.

Despite the promising outlook, the Indian forging sector faces several challenges. Fluctuations in the costs of essential raw materials like steel, aluminium and various alloys may significantly impact the industrys cost structure and overall competitiveness. The energy-intensive nature of the forging process makes the sector vulnerable to rising energy prices, which can inflate production expenses. Increasingly stringent environmental regulations necessitate substantial investments in cleaner and more sustainable manufacturing practices. The ongoing shift towards Electric Vehicles (EVs) also presents a challenge. Looking ahead, the Indian forging industry is poised for continued growth, primarily driven by robust demand from both domestic and international markets. Furthermore, the "China+1" strategy is anticipated to provide a significant boost to Indias forging industry by creating enhanced export opportunities.

Sources: The Economic Times, PIB, Technova Global https://economictimes.indiatimes.com/industry/auto/auto-news/ indias-auto-component-industry-to-hit-usd-145-billion-by-2030-exports-to-triple-niti-aayog/articleshow/120224054.cms?from=mdr https://www.iqsengg.com/blog/india-rise-in-the-global-forging-industry https://pib.gov.in/PressReleasePage.aspx?PRID=2116612 https://pib.gov.in/PressReleasePage.aspx?PRID=2117488 https://www.tecnovaglobal.com/blog/indian-casting-forging-industry-witnessing-robust-growth

Our Key Markets

US Truck and Bus Sector

The US truck and bus sector stands as a cornerstone of the national economy, orchestrating the movement of both goods and people across its expansive landscape.

Key Trends

Several key trends are actively reshaping the US truck and bus sector. The emergence of autonomous driving technology holds the potential to revolutionise trucking operations by enhancing safety, reducing labour expenses, and improving overall efficiency. The escalating demand for freight transportation, driven by the growth of e-commerce and the necessity for efficient logistics networks, is also a crucial factor influencing the sector.

The truck and bus sector in US is currently undergoing a significant transition, as it navigates geopolitical and economic pressures while purposefully advancing towards electrification and technological innovation. The interaction among government policy, market innovation and global trade will persist in influencing the future trajectory of this vital industry.

Class 8 trucks and buses are_essential to the US economy, particularly for freight transportation and passenger movement._ Class 8 trucks, in their various forms, are the workhorses of the trucking industry, transporting goods across the country._Class 8 trucks in the US are heavy-duty vehicles with a GVWR over 33,000 pounds, commonly called semi-trucks or tractor-trailers, used for long-distance freight hauling._

Performance in 2024

In 2024, US truck and bus sector navigated a complex landscape characterised by both resilience and emerging challenges. The trucking industry experienced a decline in freight demand due to inventory adjustments and cautious consumer spending.

Despite the challenges, the US market for Class 8 trucks and buses continued to show robust performance, signalling strength in both freight movement and public transportation infrastructure. Class 8 trucks, which include the heavy-duty vehicles on road, such as long-haul tractor-trailers, are essential to the nations supply chain, while buses, especially transit and school buses, play a critical role in sustainable urban mobility. The total net orders for Class 8 vehicles in 2024 increased by 11% year-over-year, slightly exceeding replacement demand levels with an average of 23,323 net orders per month. The full-year total for Class 8 orders amounted to 279,872 units. The uptick was primarily driven by the demand for heavy-duty trucks associated with infrastructure investments.

A notable trend observed is the growing interest and adoption of zero-emission vehicles, particularly within the bus sector, where new registrations of zero-emission buses attained a double-digit market share for the first time during the first half of 2024. Nevertheless, the sector continues to confront escalating operational costs, including insurance, as well as the persistent challenges of driver shortages in the trucking segment.

In US, Class 8 truck sales are forecast to experience a slight dip in 2025, with_ACT Research_projecting approximately 301,000 units sold, compared to 320,000-325,000 in 2024. While the overall market may decrease slightly, the vocational segment is expected to remain relatively strong, potentially matching 2024 sales due to ongoing infrastructure and construction projects. Several factors are expected to contribute to growth in the US Class 8 truck segment._These include the looming 2027 Environmental Protection Agency (EPA) mandate for emissions standards, the need to replace ageing equipment and the potential for new technologies like electric trucks._ Additionally, nearshoring trends and stable infrastructure-related vocational activity can also drive demand._

Reasons for Growth of US Class 8 Trucks

The growth of the U.S. Class 8 truck market is propelled by several fundamental drivers:

1. Booming E-commerce and Logistics: The rapid expansion of online retail has created an immense demand for efficient freight transportation, including long-haul and last-mile delivery solutions. This necessitates a robust fleet of heavy-duty trucks to keep pace with consumer expectations for faster deliveries.

2. Increasing International Trade and Cross-Border Connectivity: Liberalisation of trade policies and initiatives to improve cross-border connectivity are driving the need for high-performance trucks to support logistics and supply chain operations across North America.

3. Infrastructure Development and Industrial Growth: Significant investments in infrastructure projects directly translate into a higher demand for Class 8 trucks to transport raw materials, heavy equipment, and finished goods.

4. Stringent Environmental Regulations and Sustainability Goals: Stricter emission standards are compelling fleet operators to upgrade to newer, more fuel-efficient and cleaner-burning trucks.

5. Ageing Fleet Replacement: A significant portion of the existing Class 8 truck fleet in the US is ageing. This creates a natural cycle of replacement demand, especially as new regulations and technological advancements offer more compelling reasons to upgrade.

6. Government Initiatives and Investment: Government investments in transportation infrastructure and incentives promoting sustainable transportation contribute to a favourable environment for Class 8 truck sales.

Sources: IBIS World, Precedence Research https://www.ibisworld.com/united-states/industry/truck-bus-manufacturing/818/#:~:text=States%20in%202025%3F-,The%20 market%20size%20of%20the%20Truck%20%26%20Bus%20 Manufacturing%20industry%20in,is%20%2438.0bn%20in%20 2025. https://www.precedenceresearch.com/us-commercial-vehicles-market

Steady Growth ahead in CV Segment

ThebroaderU.S.commercialvehiclesmarket(encompassing both trucks and buses) was evaluated at US$ 213.35 Billion in 2024 and is projected to maintain its upward trajectory, increasing from US$ 223.19 Billion in 2025 to an estimated US$ 364.99 Billion by 2034, illustrating a steady CAGR of 6.80%.

Commercial Vehicle Space - European Market

The European commercial vehicle market is presently navigating a multifaceted landscape characterised by both growth and considerable challenges.

Market Trends

In 2024, the Light Commercial Vehicle (LCV) segment witnessed an increase of 8.3% in new registrations across the European Union, propelled by robust performances in key markets such as Spain and Germany, fuelled by surge in e-commerce and last-mile delivery services. Conversely, the truck segment experienced a decline of 6.3% during the same period. This mixed performance signifies a market in transition, influenced by factors such as economic fluctuations, regulatory changes and evolving technological landscapes.

The Commercial Vehicle(CV)marketinEuropeisundergoing a significant transformation, shaped by a combination of regulatory pressures, technological advancements and shifting customer expectations. A key trend is digitalisation, with fleet operators increasingly adopting telematics, AI-driven analytics and connected vehicle technologies to improve operational efficiency, reduce costs and enhance driver safety. Predictive maintenance and real-time route optimisation are becoming standard across fleets, supported by advances in Internet of Things and Cloud Computing. Autonomous driving technology is also gaining traction, though it remains in early stages for commercial deployment due to regulatory and safety concerns.

In 2024, the European Unions Commercial Vehicle market exhibited mixed trends across different vehicle types. Diesel remained the dominant fuel type across all segments in the same year,

1) Vans

Overall Market Performance:

Van registrations increased by_8.3%, totalling_1,586,688 units.

- Spain led with a_13.7%_increase.

- Germany:_+8.4%, France:_+1.1%, Italy:_+0.9%. Fuel Type Trends: - Diesel Vans:_Registrations rose by_10.5%fito_1,340,003 units, increasing diesels market share to_84.5%_(up 1.7 percentage points).

- Electrically Chargeable Vans:_ Sales declined by_9.1%, with market share dropping from_7.2% to 6.1%.

- Petrol Vans:_ Recorded modest growth of_ 3%, maintaining a_6%_market share.

- Hybrid-Electric Vans:_ Fell by_ 4.8%, capturing only_2%_of the market.

2) Trucks

Overall Market Performance:

Truck registrations declined by_6.3%, totalling_327,896 units. This was mainly due to an_8.5% drop in heavy-truck sales, though medium-truck registrations increased by_5.6%.

Fuel Type Trends:

- Diesel Trucks:_ Accounted for_ 95.1%_ of new registrations, despite a_6.2%_decline in volume. - Electrically Chargeable Trucks:_ Dropped by_ 4.6%, maintaining a stable_2.3%_market share. o Growing markets: Germany (+57.4%), Italy (+115.2%), Sweden (+59.6%). o Declining markets: France (-57.4%), Netherlands (-42.3%).

3) Buses

Overall Market Performance:

Bus sales grew by_9.2%, reaching_35,579 units.

- Italy:_ +26.7%, Spain:_ +10.3%, France:_ +2.2%, Germany:_-2%.

Fuel Type Trends:

- Diesel Buses:_ Registrations rose by_ 11.1%, increasing market share to_63.1%.

- Electrically Chargeable Buses:_ Surged by_ 26.8%, expanding market share from_15.9% to 18.5%. o Italy led the segment with_ 161.7%_ growth, followed by Spain (+17.5%) and Germany (+4.9%), while France saw a_11.4%_decline.

Domestic Commercial Vehicle Sector

Indias Commercial Vehicle sector displayed a mixed performance in FY25, with buses emerging as the standout segment with a robust 15% year-on-year growth, driven by the mandatory scrapping of government vehicles and healthy replacement demand.

MANAGEMENT DISCUSSION AND ANALYSIS

	Production		Domestic Sales		Exports
	FY24	FY25	FY24	FY25	FY24	FY25
Medium & Heavy Commercial
Vehicle (M&HCV)
Passenger Carrier	55,744	70,178	53,768	66,328	10,014	11,236
Goods Carrier	337,719	323,441	320,244	307,491	8,211	12,015
Total M&HCV	393,463	393,619	374,012	373,819	18,225	23,251
Light Commercial Vehicle (LCV)
Passenger Carrier	73,229	65,550	51,750	54,807	3,631	4,889
Goods Carrier	600,812	573,476	543,008	528,045	43,962	52,846
Total LCV	674,041	639,026	594,758	582,852	47,593	57,735
Total Commercial Vehicles	1,067,504	1,032,645	968,770	956,671	65,818	80,986

Source: SIAM

The_ truck segment, the backbone of Indias logistics and freight movement, faced headwinds, with M&HCV trucks declining around 4% and LCV trucks dropping around 3% year-on-year, impacted by election-related disruptions and elevated financing costs. Despite these challenges, market leaders like TATA Motors, Ashok Leyland and Volvo Eicher reported varied results across their product portfolios with passenger carriers and exports showing resilience against the broader market slowdown.

Buses led the growth in FY25, driven by the scrapping of older government vehicles and replacement demand. At the same time, M&HCV numbers declined, partly due to poor demand resulting from fewer projects being awarded in the wake of the general elections. There was some back-ended recovery seen in volume offtake in line with the pick up in the construction and infrastructure activities and a steady economic environment.

(Source: https://www.autocarpro.in/feature/cv-on-the-slow-road-to-recovery-126241)

Fuel Trends Across CV Segments

Despite rising interest in alternative fuels,_diesel remains the predominant fuel_across all Commercial Vehicle segments. Diesel-powered vehicles_continue to dominate due to their efficiency and the widespread availability of infrastructure. Meanwhile,_ CNG, LNG and Electric Vehicles_ are gradually gaining popularity, particularly in urban delivery and bus segments.

However, market sentiment is evolving. The Government_ scrappage policies_ and the_ push for electrification_have influenced purchasing behaviour. These shifts are encouraging Original Equipment Manufacturers (OEMs) to diversify their portfolios with alternative fuel options and_cleaner technologies.

Prospects

The Indian Commercial Vehicle sector presents promising prospects, primarily driven by the governments ongoing emphasis on infrastructure development and connectivity. The expansion of national highways, freight corridors, and logistics parks is expected to generate sustained demand for the transportation of goods and materials. Furthermore, the projected economic growth and the consequent increase in industrial and agricultural output will necessitate a robust transportation network, thereby further enhancing the demand for Commercial Vehicles across all segments.

The India Commercial Vehicles Market size is estimated at US$ 51.09 Billion in 2025 and is expected to reach US$ 62.95 Billion by 2029, growing at a CAGR of 5.36% during the forecast period 2025-2029.

The cyclical replacement of the ageing vehicle fleet, in conjunction with the emergence of evolving emission regulations and a burgeoning preference for technologically advanced and fuel-efficient vehicles, will significantly contribute to future growth. https://www.mordorintelligence.com/industry-reports/india-commercial-vehicles-market https://www.business-standard.com/industry/auto/commercial-vehicle-sales-may-touch-1-mn-mark-in-fy26-after-7-yrs-crisil-125041601018_1.html

Infrastructure Development: The Indian governments strong emphasis on infrastructure projects, including the Bharatmala and Sagarmala initiatives, the development of national highways, bridges, and smart cities, directly fuels the demand for Heavy and Medium Commercial Vehicles like trucks and construction vehicles. A 10–11% increase in central government capital expenditure is expected , to boost infrastructure projects, thereby driving demand for Commercial Vehicles.

Industrial Growth and Mining Activities: Expansion in manufacturing, mining and related sectors necessitates the transportation of raw materials and finished goods, thereby increasing the demand for Commercial Vehicles. Clearances for major development works, including mining and port projects, also play a significant role.

E-commerce and Logistics Sector Boom: The rapid growth of e-commerce and the logistics industry creates a substantial need for efficient transportation and last-mile delivery services, particularly boosting the demand for Light and Medium Commercial Vehicles. The rise of organised retail and just-in-time inventory models also contributes.

Vehicle Scrappage Policy: The phased implementation of the vehicle scrappage policy, starting with government ehicles older than 15 years and eventually including Commercial Vehicles based on fitness tests, is expected to drive significant replacement demand.

Policy Support: Initiatives like the PM-eBus Sewa scheme, launched in August 2023 with a budget of _ 57,613 Crores, aims to deploy 10,000 electric buses across 100 cities, stimulating demand in the electric CV segment.

The policy mandates that private vehicles older than 20 years and Commercial Vehicles older than 15 years must undergo mandatory fitness tests at designated Automated Testing Stations (ATS)._ If a vehicle fails this test, it is classified as an End-of-Life Vehicle (ELV) and is recommended for scrapping._The policy became effective for Heavy Commercial Vehicles on April 1, 2023, and for other vehicles, including private ones, from June 1, 2024. Estimates indicate that there are approximately 1.1 Million Medium and Heavy-duty Commercial Vehicles older than 15 years in India.

The policy also aims to formalise the vehicle scrappage industry, which has been largely informal. By establishing Registered Vehicle Scrapping Facilities (RVSFs) and promoting recycling, the initiative is expected to generate employment and provide low-cost raw materials to industries such as automotive, steel, and electronics. Furthermore, the government has urged car manufacturers to establish their own scrapping centres, anticipating that this move could boost vehicle sales by 18–20%.

Source: PIB, IndBiz, The Times of India https://pib.gov.in/PressReleasePage.aspx?PRID=2117488 https://indbiz.gov.in/commercial-vehicle-sales-are-looking-up-as-economic-activity-returns/ https://timesofindia.indiatimes.com/business/india-business/ vehicle-scrappage-policy-will-spur-replacement-demand-icra/ articleshow/114048647.cms#:~:text=Vehicle%20scrappage%20 policy%20will%20spur%20replacement%20demand%3A%20 ICRA%20%2D%20Times%20of%20India,-Navratri%20ColorsBigg https://www.business-standard.com/industry/auto/commercial-vehicle-sales-may-touch-1-mn-mark-in-fy26-after-7-yrs-crisil-125041601018_1.html

Scrappage facilities

Indias vehicle scrappage infrastructure is expanding under the National Vehicle Scrappage Policy, aiming to phase out old, polluting vehicles and promote sustainable practices. As of late 2024, there are 63 operational Registered Vehicle Scrapping Facilities (RVSFs) across the country, with an additional 60 under construction and 40 in the pipeline. These facilities are authorised to dismantle and recycle End-of-Life Vehicles (ELVs) in an environmentally responsible manner. In line with Indias Vehicle Scrapping Policy, several corporates are actively establishing RVSFs across the country to promote a circular economy, support

Vehicle Scrapping in India

The Vehicle Scrappage Policy in India, launched in 2021 and implemented in 2022, aims to phase out old and unfit vehicles from roads, thereby reducing pollution and promoting safer, cleaner, and technologically advanced vehicles._ sustainable automotive practices and manage End-of-Life Vehicles (ELVs) responsibly. Major automotive companies are actively participating in this initiative. The Ministry of Road Transport and Highways (MoRTH) has developed a centralised portal that provides state-wise details of operational RVSFs.

To encourage participation, the government offers incentives for scrapping old vehicles. These include a 4–6% scrap value of the ex-showroom price of a new vehicle, waivers on registration fees and road tax concessions of up to 25% for private vehicles and 15% for Commercial Vehicles. Additionally, automakers may provide discounts of up to 5% on new vehicle purchases when an old vehicle is scrapped.

Light Commercial Vehicles

The Light Commercial Vehicle (LCV) market in India is a significant segment of the overall commercial vehicle industry, playing a crucial role in logistics and transportation, especially for last-mile delivery and intra-city movement of goods. LCVs in India are generally classified as vehicles with a Gross Vehicle Weight (GVW) ranging from 3.5 to 7.5 metric tons. Some classifications may extend slightly beyond this range. The market caters to various applications, driven by sectors like e-commerce, retail, agriculture and infrastructure.

Light commercial pick-up trucks currently dominate the segment, accounting for approximately 57% of the Indian Commercial Vehicle market in 2024. The demand for smaller, more agile vehicles that can navigate congested city roads while offering adequate cargo space has made them the preferred choice for last-mile delivery services. Rapid urbanisation and increasing logistics needs in Tier II and Tier III cities also contribute to this upward trend.

Electrification is playing an increasingly important role in shaping the future of LCVs in India. Lithium Iron Phosphate

(LFP) batteries are emerging as the most viable option for electric LCVs due to their cost efficiency and safety advantages. Government initiatives such as infrastructure investment programs and favourable policies for electric vehicles have further accelerated the adoption of LCVs.

Performance in FY25

The LCV (trucks) segment saw a volume de-growth in FY2025, as elevated financing costs and a slowdown in the e-commerce segment continued to have a bearing on demand. The increasing preference for pre-owned vehicles over new ones, amid rising total cost of ownership, has also been one of the headwinds for the sector in recent years. Sluggish demand for LCVs from rural markets also added to the woes, although demand regained some momentum in the post-monsoon months.

Prospects

After a period of stagnation in FY25, the Indian Commercial Vehicle (CV) industry, including LCVs, is gearing up for a modest recovery. Crisil Ratings forecasts_a rebound in the Indian CV industry, with domestic sales volumes expected to grow by 3-5% in FY26, potentially reaching the pre-pandemic peak of 1 Million units._This recovery is driven by infrastructure growth, a robust vehicle replacement cycle, and government initiatives such as the PM-eBus Sewa scheme._

The prospects for growth in Indias Light Commercial Vehicle (LCV) industry are strong, supported by several structural and emerging trends. Rapid urbanisation, continued rise of e-commerce and increased demand for efficient last-mile delivery solutions are key drivers of demand. Government initiatives focused on infrastructure development and the promotion of electric mobility are also creating a favourable environment for expansion.

Source: Statista https://www.statista.com/outlook/mmo/commercial-vehicles/light-commercial-vehicles/india

Indian Railways

In FY 2024–25, Indian Railways achieved notable advancements in infrastructure development, capacity augmentation and operational efficiency, thereby strengthening its position as the backbone of national transportation. With a historic capital expenditure allocation of _2.65 Lakh Crores, primarily underpinned by gross budgetary support, the Railways has prioritised the expansion of network connectivity, modernisation of assets and enhancement of safety standards. Revenue expenditure escalated to _2.99 Lakh Crores, indicating sustained investment in service delivery and maintenance. In the realm of manufacturing, Indian Railways has realised significant production advancement. The organisation enhanced its locomotive output by 27%, successfully delivering 1,500 units, while production levels for coaches and wagons also experienced consistent growth. The ongoing commissioning of Vande Bharat trains, which has introduced 17 new pairs, underscores the commitment to high-speed and modern passenger services.

Indian Railways is increasing the number of coaches required, particularly for Vande Bharat trains, which are part of a larger plan to manufacture 200 Vande Bharat and other high-speed trains._The plan to add nine more Vande Bharat Sleeper Train Sets between April and December 2025 and full-scale production starting in 2026-27, will significantly increase coach and wheel needs._The annual requirement for forged wheels could rise to around 2 lakh units from 2026 onwards._ Infrastructure development remained a cornerstone, with over 2,000 kms of new tracks commissioned and electrification extended to 97% of the broad-gauge network. Safety was also a high priority, with _1.16 Lakh Crores earmarked for safety measures and the Kavach automatic train protection system deployed across key routes.

Forged Wheels: With high-speed train projects slated for launch in the coming years, Indian Railways is bracing for a surge in demand for forged wheels by augmenting local production. As the Centre has a mega plan to manufacture 200 Vande Bharat Express and other high-speed trains, the annual requirement for forged wheels could climb to around 2 lakh units from 2026 onwards. Forged wheels are specially designed wheels built at high pressure for trains running at higher speeds than regular Indian Railways trains. They are structurally stronger, without the potential faultlines such as porosity and cavities typical of normal cast wheels. The compression of the metal also increases wheel longevity and resistance against wear and tear.

Despite the domestic production of approximately 40,000 wheels, Indian Railways had to import forged wheels worth

Rs. 900 Crores majorly from China during FY25 to meet operational needs. Indian Railways is actively working towards becoming self-reliant in the manufacturing of forged wheels for its trains. Currently, a significant portion of these wheels are imported but the national transporter has initiated projects to establish domestic manufacturing capabilities.

About the Company

Ramkrishna Forgings Limited, headquartered in Kolkata with primary operations in Jharkhand, stands as a prominent leader in Indias forging sector. It holds the distinction of being the largest forging company in Eastern India and ranks amongst the top nationwide, supplying high-quality forged components to both domestic and international clients.

The Companys Jharkhand facilities boast advanced production and quality control technologies, allowing it to readily meet the stringent quality demands of global Original Equipment Manufacturers (OEMs). Through consistent investments in expanding its production capabilities and enhancing its expertise, the Company has not only weathered sectoral challenges but has emerged even stronger.

Its ability to manufacture tailored products has broadened its product range and expanded its potential market. This capability has fostered strong partnerships with Tier-1 suppliers in the United States of America and OEMs in Europe. To further its global reach, the Company has also strategically appointed sales leaders in key regions .

Strong Manufacturing Capabilities: Advanced forging facilities with large-scale production capacities, including closed die forgings, press forgings and ring rolling. Made a foray in Warm forgings and Cold forgings .

Diversified Product Portfolio: Offers a wide range of products for Axles & Transmissions for commercial vehicles including front axle beams, steering knuckles and Non-Auto segments.

Robust Client Base: Supplies to leading OEMs and Tier-1 suppliers in India and Internationally. Has a Customer retention for more than 10 years also with repeat orders. Increasing product basket with Customers.

Global Footprint: Presence in Europe, North America, and Asia; growing exports reduce dependence on domestic markets.

Integrated Operations: End-to-end capabilities from forging to machining including heat tratemnet and painting, improving quality control and lead time.

High Dependency on the Automotive Sector: A large portion of revenue comes from the cyclical commercial vehicle segment making it vulnerable to market fluctuations in this sector.

Volatile Raw Material Prices: Volatility in raw material prices impacts margins.

Electric Vehicle (EV) Segment: Rising EV demand presents opportunities to develop and supply new forged components.

Emergence of new markets: Sudden changes in polies or geo-political changes provides growth oppurtunities.

Non Auto growth: Increasing government investment in railway modernisation,mining,oil & gas .

Aftermarket Growth: Potential to expand presence in aftermarket spares and services. Sustainability Initiatives: The adoption of green manufacturing and energy-e_cient processes can attract ESG-focused investors and clients.

Global Economic Slowdowns: Export demand can be impacted by geopolitical tensions or global recession.

Intense Competition: Both domestic and international competitors offer price pressures and technological advancements.

Government policies : Sudden changes in the Government policies affects demand.

Financial & Operational Performance

Financial Performance

• Net Sales increased by 3.86 percent to Rs. 3,63,429.92_Lakhs in FY 2024-25 from Rs. 3,49,933.17_Lakhs in FY 2023-24.

• Export Sales decreased marginally by 0.05 percent to_Rs. 1,48,209.02 Lakhs in 2024-25 from Rs. 1,48,289.85 Lakhs in FY 2023-24.

• EBIDTA decreased by 20.29% to Rs. 61,085.75 Lakhs in FY 2024-25 from Rs. 76,632.07_ Lakhs in FY 2023-24.

• PAT increased by 46.62 percent to Rs. 40,182.01 Lakhs in FY 2024-25 from Rs. 27,404.73 Lakhs in FY 2023-24.

Analysis of Financial Statements: Statement of Profit and Loss:

The Company recast its figures for the FY 31 March, 2024 on account of merger of ACIL with the Company w.e.f 19 February, 2024 and on account of finding of the Interim Joint Fact-Finding Report of the "Independent External Agencies" on account of discrepancy in physical inventory.

Revenue from Operations: The net revenues for the FY24-25 was

Rs. 3,63,429.92_Lakhs as compared to Rs 3,49,933.17 Lakhs in FY 2023-24, showing an increase of 3.86% Revenue from exports decreased marginally by 0.05% to Rs 1,48,209.02 Lakhs in FY 2024-25 from Rs 1,48,289.85 Lakhs in FY 2023-24.

The revenues in export segment decreased on account of the slow- down in demand in the North American Market and also in the European Market. The Company has taken steps to expand its reach and increase its product profile with the existing customers and addition of new customers both in the North American Market and European Market. The Company has also taken steps to penetrate in the PV ( including EV) segment.

The revenue in the domestic segment has increased to Rs 2,15,220.90 Lakhs in FY 2024-25 from Rs 2,01,643.32 Lakhs in FY 2023-24 on account of improvement in the product basket with the existing customers. The Company is also expanding its base in the LCV segment.

Operating Expenses: Operating expenses (total expenses less interest and depreciation and stock variation) increased by 14.09% to Rs 3,14,495.49 Lakhs in FY 2024-25 from Rs 2,75,654.64 Lakhs in FY 2023-24. Operating expenses as a percentage of net sales stood at 86.54 % in FY 2024-25 as against 78.77 % in FY 2023-24.

Cost of Raw Material Consumed: Material costs increased by 7.29% to Rs 1,93,394.51 Lakhs in FY 2024-25 from Rs. 1,80,255.75 Lakhs in FY 2023-24. This increase was owing to an increase in production volumes to 196,023 tons in FY 2024-25 from 187,144 tons in FY 2023-24 . Employee Expenses: It is increased by 24.55% to Rs. 21,861.15 Lakhs in FY 2024-25 from Rs 17,552.78 Lakhs in FY 2023-24 on account on increase in the manpower strength, increments and pay for performance during the year Finance Cost: The Finance cost increased by 6.91%, to Rs 14,667.90 Lakhs in FY 2024-25 from Rs 13,719.86 Lakhs in FY 2023-24 due in increase in interest cost. The increase in interest cost is attributable to the increase in the Loans and hardening of the interest rate during the year. The interest cover stood at 4.16 x in 2024-25 against 5.59x in 2023-24. Profitability and Margins: EBIDTA decreased by 20.29 % to Rs.61085.75 Lakhs in FY 2024-25 from Rs 76,632.07 Lakhs in 2023-24. The EBIDTA margin on net sales was 16.81 % in 2024-25 in comparison to 21.90% in FY 2023-24. The Net profit after Tax stood at Rs 40,182.01 Lakhs in 2024-25 as compared to Rs 27,404.73 Lakhs in FY 2023-24. The net margin stood at 11.06% in FY 2024-25 as against 7.83% in FY 2023-24. The PAT for FY 2024-25 includes exceptional gain from sale of Globe All India Services Limited and also includes tax gain on account of merger with ACIL Limited.

Balance Sheet :

Capital employed (Total Assets less Current Liabilities excluding Current Maturities of Long Term Debt): The Capital employed in the business increased by 10.04%, to Rs 4,05,632.47 Lakhs as on March 31,2025 from Rs 3,68,618.19 Lakhs as on March 31,2024. The Increase was on account of increase in shareholder funds and loans during the year.

Shareholders funds: The balance under this head increased by 14.89%, to Rs 3,01,013.83 lakhs as on March 31, 2025 from Rs 2,62,012.32 lakhs as on March 31, 2024 on account of increase in share capital and plough back of profits.

External funds: The Companys Total Net Debt (after adjusting cash and cash equivalents, current investment and recourse bill discounting) increased by 131.45% to Rs 1,39,880.70 Lakhs as on March 31,2025 from Rs 60,436.63 Lakhs as on March 31,2024. The Net Debt-Equity ratio stood at 0.46x as on March 31, 2025 against 0.23x as on March 31, 2024. The Net Debt/EBDITA stood at 2.29 x as on March 31,2025 as against 0.79x as on March 31,2024.

Gross block of Fixed Assets including Right to Use Assets, Goodwill and Intangible assets : The Gross Block of Fixed Assets increased by 19.47 % to Rs.3,77,229.09 Lakhs as on March 31,2025 from Rs.3,15,753.42 Lakhs as on March 31,2024. The Company has added 57500 tons of production capacity during the year. Apart from that the company has also made partial capital expenditure for the 8000 ton press lines, Aluminium Forgings and Casting division during the year.

Key Financial Indicators (Rs in Lakhs except ratios)

Particulars	As at Mar 31, 2024	As at Mar 31, 2025	Percentage- Change
Net Revenue from Operations	3,49,933.17	3,63,429.92	3.86
EBDITA	76,632.07	61085.75	(20.29)
EBDITA Margin on net sales	21.90	16.81	-
Net Profit after Tax	27,404.73	40,182.01	46.62
Net Profit Margin on net sales	7.83	11.06	-
Net Worth	2,62,012.32	3,01,013.83	14.89
Total Net Debt	60,436.63	1,39,880.70	131.45
Total Net Debt/ Equity	0.23	0.46	100
Return on Avg. Net worth	13.89	14.27	-
Current Ratio	1.54	1.11	(27.92)
Interest Coverage Ratio	5.59	4.16	(25.44)
Inventory Turnover Ratio	2.53	2.44	(3.24)
Receivable Turnover Ratio	4.62	4.20	(9.11)
Book Value per Share	144.94	166.28	14.72

Note:

- The formula for Interest Coverage Ratio has been taken as Earnings before Interest, Depreciation & Tax (EBITDA)/Interest - The formula for Current Ratio is Current Assets divided by Current Liabilities - The formula for Return on Avg.Net worth is Profit for the year divided by Average Shareholders Equity (Average Shareholders Equity = Average of total equity of current year and previous year) - The formula for Inventory Turnover Ratio is Cost of Goods Sold divided by Average Inventory (Average Inventory = Average of Opening and Closing Inventory) - The formula for Receivable Turnover Ratio is Credit Sales (Credit Sales = Revenue from operations - Subsidies/Government Grants - Export incentives) divided by Average Trade receivables (Average Trade receivables = Average of Trade receivables of current year and previous year)

Risk Management

Risk management, encompassing the identification, analysis and prioritisation of risks, is crucial for an engineering company to mitigate or eliminate potential adverse effects on its overall profitability, market position, and financial stability. It is therefore considered an essential element in ensuring the Companys effectiveness.

The Company employs a comprehensive risk management approach that integrates strategy and operations to proactively anticipate, address, and mitigate both existing and emerging risks. This framework extends beyond conventional boundaries by engaging all key managers to ensure thorough risk awareness and proactive management practices.

The Board of Directors of the Company has established a Risk Management Committee, comprising high-level senior management and Independent Directors. This Committee is responsible for reviewing the risks the Company faces and ensuring that appropriate mitigation measures are implemented transparently and effectively at regular intervals.

Market and Customer Concentration Risk

High dependency on the automotive sector and a few large OEMs and Tier-1 customers could expose the Company to cyclical downturns or loss of key customers.

Mitigation:

Diversification across geographies (Europe, US, India). - New product development with existing customers.

Developing new customers.

Expanding product portfolio to include non-automotive sectors like railways, off-highway, defence, and renewables.

Strengthening aftermarket and export segments.

Technological Obsolescence and EV Transition

Rapid transition to Electric Vehicles (EVs) could reduce demand for traditional ICE (Internal Combustion Engine) components.

Mitigation:

- Investment in R&D to develop components for EVs, hybrid systems, and lightweight solutions.

- Strategic partnerships or JVs with EV manufacturers or component makers.

- Diversification into new energy sectors and applications.

Human Resource Risk

Lack of a skilled workforce with specialised knowledge and expertise can impact operation and innovation.

Mitigation

Building a culture of ownership among employees and adequate insurance for key employees.

Training program to develop new skills and update them with the latest technologies.

Offer opportunities , fostering knowledge transfer within the Company.

Operational and Supply Chain Disruption

Disruptions due to geopolitical conflicts, pandemics, or logistic bottlenecks can hamper production.

Mitigation:

- Domestic sourcing for production.

- Multi-location sourcing and warehousing strategy. - Use of digital supply chain monitoring tools. - Building buffer stocks and working with multiple suppliers.

Regulatory and Compliance Risk

Increasing environmental and labour regulations may raise compliance costs or legal exposure.

Mitigation:

- Compliance teams to monitor legal changes in all operating geographies.

- Proactive investment in green manufacturing technologies and safety systems.

- ESG (Environmental, Social, and Governance) integration in corporate strategy.

Human Resource

The Company recognises its Intellectual Capital as its most valuable asset, spanning from executive leadership to the shop floor. Consequently, the Company prioritises employee engagement and has implemented various initiatives to foster a work friendly environment and motivate its workforce.

Training:

To align employee capabilities with evolving business demands, the Company conducts numerous training programs focused on enhancing both functional and behavioural soft skills. These programs are held throughout the year, utilising internal and external trainers. This approach facilitates the acquisition of insights into current trends and emerging opportunities. The Company has undertaken various training programs covering health and safety, ESG (Environmental, Social, and Governance), HR – Diversity, Equity & Inclusion, POSH (Prevention of Sexual Harassment), Stress Management, and Team Building. A particular emphasis is placed on ensuring the safety of its employees and workers.

Employee Engagement:

The Company invests significant effort in cultivating a ‘fun at work atmosphere and an inclusive culture for its team members. Engagement initiatives include a suggestion scheme, cross-functional 5S zonal competitions, and birthday celebrations. The ‘Umang initiative, a mass communication platform between management and team members, has made considerable progress by fostering extended discussions that enhance operational and strategic awareness. The cross-pollination of ideas through this platform has also contributed to improvements in business operations. The high level of engagement within the Company strengthens interpersonal understanding and builds bonds that extend beyond professional requirements, which interestingly acts as a catalyst for business growth. Furthermore, the Company organises inter-plant tournaments to enhance team spirit and cohesiveness among employees.

Performance and Rewards:

The Company maintains a practice of regular appraisals, through which high-performing individuals are periodically recognised. Recognition programs such as ‘Employee of the Month, ‘Best Suggestion & Kaizen, and ‘Maximum Attendance Award are also undertaken. Additionally, performance-linked incentive programs have been introduced to nurture employee motivation.

Health Protection:

To safeguard the health of its employees and ensure a healthy working environment, the Company has implemented a Group Health (Floater) Insurance policy and a Group Personal Accident Insurance policy. To develop its leadership pipeline, the Company conducts a talent management program for senior and middle management. This program aims to build leadership competencies among selected members, enabling them to assume larger roles in advancing the organisation. The Company also has an ESOP (Employee Stock Option Plan) scheme for senior management, under which options have been vested, thereby strengthening the bond between the Company and its key decision-makers.

Internal Audit and Control:

The Company has established adequate systems of internal controls and documented procedures covering all financial and operating functions. These are designed to provide reasonable assurance regarding the maintenance of proper accounting control, monitoring the economy and efficiency of the Company, protecting assets from unauthorised use or losses, and ensuring the reliability of financial and operational information. The internal controls are designed to ensure that financial and other records are reliable for preparing financial statements, collating other data, and maintaining accountability of assets.

Cautionary Statement:

Statements in this Management Discussion and Analysis Report, describing the Companys objectives, projections, estimates, and expectations may be "Forward-Looking Statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.