Ramkrishna Forgings Limited has informed the Exchange about Investor Presentation
F RAMERISHNA FORGINGS LIMITED Date: 22 October, 2022 To To The Listing Department The Listing Department BSE Limited National Stock Exchange of India Limited PJ] Towers “Exchange Plaza” C-1, Block G Dalal Street Bandra- Kurla Complex, Bandra (E) Mumbai - 400 001 Mumbai- 400051 BSE SCRIP CODE: 532527 NSE SYMBOL: Dear Sir / Madam, Sub: Announcement under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Investors Presentation Please find enclosed herewith the copy of the Q2 & H1 FY 23 Earnings Presentation of the Company for the Quarter and Half Year ended 30 September, 2022. This is for your kind information and records. Thanking You. Yours truly, For Ramkrishna Forgings Limited Rajesh Mundhra Company Secretary & Compliance Officer ACS: 12991 Encl.: As above REGISTERED & CORPORATE OFFICE 23 CIRCUS AVENUE, KOLKATA 700017, WEST BENGAL, INDIA PHONE : (+91 33)4082 0900 / 7122 0900, FAX : (+91 33}4082 0998 / 7122 0998, EMAIL: info@ramkrishnaforgings.com, WEB : www.ramkrishnaforgings.com CIN NO. :L74210WB1981PLC034281 Q2 & H1 FY23
Earnings Presentation
OCTOBER 2022
FINANCIAL HIGHLIGHTS
Strong growth backed by profitability
(Standalone)
Revenue
EBITDA* & EBITDA Margin
(₹ in LAKHS)
PAT & PAT Margin
+32%
65,075
76,255
57,894
+22%
17,006
13,918
14,370
+28%
6,394
5,011
4,726
24.04%
22.08%
22.30%
8.66%
7.26%
8.39%
Q2FY22
Q1FY23
Q2FY23
Q2FY22
Q1FY23
Q2FY23
Q2FY22
Q1FY23
Q2FY23
Revenue
EBITDA* & EBITDA Margin
PAT & PAT Margin
+42%
1,41,329
99,607
+34%
31,376
23,450
+49%
11,120
7,472
23.54%
22.20%
7.50%
7.87%
H1FY22
H1FY23
*Excluding Other Income Note: Rounded off to the nearest whole number
Q2 & H1FY23 Earnings Presentation
H1FY22
H1FY23
H1FY22
H1FY23
3
Strong growth backed by profitability
(Consolidated)
Revenue
EBITDA* & EBITDA Margin
(₹ in LAKHS)
PAT & PAT Margin
22.64%
21.44%
21.27%
7.61%
7.35%
8.15%
+42%
69,933
82,444
57,882
+34%
14,994
17,538
13,107
+53%
5,139
6,723
4,406
Q2FY22
Q1FY23
Q2FY23
Q2FY22
Q1FY23
Q2FY23
Q2FY22
Q1FY23
Q2FY23
Revenue
EBITDA* & EBITDA Margin
PAT & PAT Margin
+52%
1,52,377
+43%
32,533
1,00,020
22,685
+73%
11,862
6,874
22.68%
21.35%
6.87%
7.78%
H1FY22
H1FY23
*Excluding Other Income Note: Rounded off to the nearest whole number
H1FY22
H1FY23
H1FY22
H1FY23
Q2 & H1FY23 Earnings Presentation
4
… backed by strong volume growth
Volume (tons)
Realisation (Rs. Lac/ (ton)
+14%
30,496
28,279
16,349
20,726
32,180
20,531
11,930
9,770
11,649
+8%
1.76
2.27
1.86
1.92
2.40
2.52
Q2 FY22
Q1FY23
Q2FY23
Q2 FY22
Q1FY23
Q2FY23
Domestic Markets
Export Markets
Domestic Markets*
Export Markets**
Volume (tons)
Realisation (Rs. Lac/ (ton)
Total Revenue Breakup (Rs. Lakhs.)
Particulars
Q2FY23 Q2FY22
YoY
Q1FY23
QoQ
Domestic Markets
43,626
28,820
51.4% 39,925
9.3%
Export Markets
32,109
28,674
12.0% 24,739
29.8%
Other Income
Export Incentive
59
520
38
400
55.3%
30.0%
66
410
-10.6%
26.8%
Total
76,314
57,932
31.7% 65,140
17.2%
+25%
+8%
Total Revenue Breakup (Rs. Lakhs.)
50,185
28,033
22,152
H1FY22
62,676
41,257
21,419
H1FY23
1.71
2.20
1.89
2.46
H1 FY22
H1 FY23
Particulars
Domestic Markets
Export Markets
Other Income
Export Incentive
Total
H1FY23
H1FY22
83,551
56,849
125
930
48,056
50,699
117
852
YoY
73.9%
12.1%
6.8%
9.2%
1,41,455
99,724
41.8%
Domestic Markets
Export Markets
Domestic Markets*
Export Markets**
Q2 & H1FY23 Earnings Presentation
*Excluding Fabrication sales & price increase for earlier period **Excluding ocean freight & price increase for earlier period
5
… with improving return ratios
ROCE (%)
NET DEBT TO EBITDA (X)
ROE (%)
17.90%
4.66
4.65
18.87%
19.44%
14.73%
5.80%
4.58%
2.54
1.95
3.14%
1.10%
FY20*
FY21**
FY22
H1FY23#
FY20*
FY21**
FY22
H1FY23#
FY20*
FY21**
FY22
H1FY23#
Net Debt to Equity (x)
1.20
1.22
1.08
Fixed Asset Turnover (x)
1.76
1.47
1.03
0.81
0.86
# Annualized.
FY20*
FY21**
FY22
H1FY23
FY20*
FY21**
FY22
H1FY23#
ROCE- EBIT Less Other Income / (Net Debt + Equity) ROE- PAT/ Net Worth Net Debt to Equity- Net Debt/ Net worth FATR- Revenue / Fixed Assets (Net) * - Fy20 Performance impacted due to economic slowdown leading to sluggish demand for CVs ** - FY21 Performance impacted due to COVID-19 induced lockdown
Q2 & H1FY23 Earnings Presentation
6
Strong Operating and Financial Performance
Installed Capacity
+25%
1,87,100
1,50,000
1,52,550
FY20
FY21
FY22
EBITDA*
+158%
527
204
230
FY20
FY21
FY22
*Excluding Other Income Note: Rounded off to the nearest whole number
Q2 & H1FY23 Earnings Presentation
Revenue
+105%
1,288
FY21
PAT
+1970%
1,112
FY20
10
FY20
28
FY21
(₹ in Crores)
2,285
FY22
207
FY22
7
Manufacturing capacity and utilization trend
Particulars
Installed Capacity
Q2FY23
Q1FY23
Q4FY22
Q3FY22
Q2FY22
Q1FY22
Production Capacity (MT)
Utilisation (%)*
Production Capacity (MT)
Utilisation (%)*
Production Capacity (MT)
Utilisation (%)*
Production Capacity (MT)
Utilisation (%)*
Production Capacity (MT)
Utilisation (%)*
Production Capacity (MT)
Utilisation (%)*
Ring Rolling
24,000
7,042
117%
7,018
117%
6,841
114%
6,918
115%
6,990
117%
7,528
125%
Forgings
46,000
11,732
102%
10,963
95%
12,104
105%
10,766
94%
11,606
101%
12,037
105%
Press
117,100
19,696
67%
18,489
63%
19,038
65%
16,473
56%
18,267
62%
15,871
54%
Total Capacity
187,100
38,470
82%
36,470
78%
37,983
81%
34,157
73%
36,863
79%
35,436
76%
*Utilzation (%) has been calculated on installed capacity on Annualized basis
Q2 & H1FY23 Earnings Presentation
8
Capital allocation - update
Particulars
Long Term Debt (incl. current Maturities of Long Term Debt)
Short Term Debt
Total Debt
Mar’22
99,185
58,554
1,57,740
₹ in LAKHS
Sep’22
93,536
38,389
1,31,925
01
The Company expect to achieve a revenue growth of 20% CAGR over a period of next 3 years
The repayment of debt and payment of dividend will be commensurate with increased cash flow in line with the above growth.
02
Q2 & H1FY23 Earnings Presentation
9
Journey over four decades
1981
2004
2006
2007
2013
Company Incorporation
Launched IPO
Investment from UTI Venture Funds Management Company (Ascent Capital Limited)
Commenced ring rolling press line with machining facilities
Received equity and debt funding from IFC
Equity funding from Wayzata for automated press
2014
2015
2017
2020
2021
Commissioned 2 press lines of 3150T and 4500T
Commenced supplies to leading Tier I customer in North America
Commissioned 2 of its Press Lines of 6,300T & 12,500T
In-house R&D team received accreditation from DSIR
Commissioned Hollow Spindle Line
Raised ₹ 2,000mn via QIP
Commissioned 7,000T Press Line
Commissioned a Warm Forging Line and a Fabrication Facility
Q2 & H1FY23 Earnings Presentation
10
KEY INITIATIVES
IMPROVING REVENUE MIX
Q2 & H1FY23 Earnings Presentation
12
Diversified Revenues
H1 FY23
By Geography
H1 FY23
By Segment
By Industry
25%
18%
14%
61%
82%
Asia
Europe
North America
Auto
Non-Auto
FY22
81.1% 81.1%
1.7%
7.6%
Automobiles
Railways
H1 FY23
81.6%
2.5%
6.5%
FY22
19%
Mining, Earth Moving, Farm & Gen. Engg
FY22
30%
14%
56%
Asia
Europe
North America
Auto
Non-Auto
Q2 & H1FY23 Earnings Presentation
81%
0.9%
8.7%
Oil & Gas
Others
1.6%
7.8%
13
Key business updates
Rail Road Update
Railway Passenger coaches undercarriage items like Bogie frame & Bogie bolster with strong quality adding to robust performance and RKFL gets enlisted in the Preferred Category
Farm Equipment Update
Biggest Northern India based Tractor manufacture awarded a Prime Gear business worth Rs. 15 Crore per annum.
Q2 & H1FY23 Earnings Presentation
14
EV PRESENCE
Q2 & H1FY23 Earnings Presentation
15
EV programs running Globally
North America
Europe
India/ASIA Pacific
India / Asia Pacific 3 Customer ✓ 6 Programs ❑ 3 Programs
Europe 2 Customer ❑ 3 Programs
North America 1 Customer ✓ 5 Programs ❑ 4 Programs
Q2 & H1FY23 Earnings Presentation
✓ Programs in Serial Productions ❑ Programs in Order book ❑ Swedish OEM awards business worth 15 million Euros for component of EV truck for European Market to commence their development & supplies till 2030 for the awarded business.
16
Well positioned to capture future growth
• We are adding the following Capacities - Enomoto 630T Press
RA Shaft -Press line 6000 T Press line Upsetter
• Will be ready by the above new Capacities by the Financial year 2023-24. With this
capacities, we will be able to achieve a topline of Rs 5000 Crores (at current commodity price)
• For above CAPEX, we have already incurred Rs 153 Crores.
• Capacity sufficient for the next phase of growth.
• Capacity ramp-up along with operating leverage will result in faster improvement in
profitability.
Q2 & H1FY23 Earnings Presentation
Installed Capacity
1,17,100
46,000
24,000
Ring Rolling
Forgings
Press
H1 FY23
Capacity Utilization
117.17%*
98.68%*
65.22%*
38,185
22,695
14,060
Ring Rolling
Forgings
Press
* Utilization % calculated On Annualized basis
17
ESG
Q2 & H1FY23 Earnings Presentation
18
Environmental
Environmental Consciousness | H1 2023 Highlights
United Nations Sustainable Development Goals
ENVIRONMENTAL CONSCIOUSNESS
One of the most visible environmental effects of forging companies is energy and water use and industrial waste.
Adopting Clean Energy Practices
Our commitment is to be powered by 50% green energy by 2028.
In an effort to meet our commitments we will be installing rooftop solar plant at our Plants in Jamshedpur.
In FY2022, we committed to taking sustained efforts a healthy planet by reducing our carbon footprint, mitigating climate change and optimizing our business operations.
towards
creating
Elements of our work impact each of the SDGs, but we focus our efforts on those which have the most material current and potential impact. Within this document we indicate where activity aligns with specific SDGs, although this is not exhaustive.
Reducing our GHG emissions
Our commitment emissions by 20% by 2030.
is to reduce Scope 1 and Scope 2
In an effort to meet our commitments we need to understand where we are. We put in motion a series of activities which will help us achieve our commitments.
We at RKFL are committed to a carbon neutral future and we will continue to work actively towards our commitments.
Investor Communication
Chaitanya Jalan Executive Director
Q2 & H1FY23 Earnings Presentation
INVESTING IN A 4 MW SOLAR PLANT
Outcome
Initiatives Implemented
Our plant in Jamshedpur is spread across many acres. Given the roof space, it is best positioned to support our aspirations to install rooftop solar plants across our facilities. This will help us further reduce our dependency on fossil fuels and shift to renewable energy helping us minimize our carbon footprint considerably.
Efficiencies
Identified energy hotspots across plants
Monitoring
Awareness
Introduced a standard data monitoring tool across plants
A workshop was conducted to raise awareness across all plants on ESG
New Initiative
Actionable plan to recover exhaust gases from furnaces
19
Environmental
Environmental Consciousness | Case study
Case study: Keep your city clean Project
The Swachh Bharath Mission, of Clean India Mission, is a country wide campaign initiated by the government of India in 2014.
It is focused on eliminating open defection and improving solid waste management across cities in India.
The Challenge
The soaring urban population and increasing consumption has led to rapid increase in waste across our cities in India. Segregation of waste into biodegradable and dry materials at the source is critical for sustainable waste management. Lack of access of recycling bins is the largest deterrent to recycling.
Solution
In an effort to support the Central governments efforts to improve solid waste management, RKFL launched the Keep your city Clean Project. A partnership was forged with Newage Clean Solutions to ensure that 45 bins will be installed across Jamshedpur and regularly maintained.
Impact
✓ Income opportunities were provided to the training team hired to maintain these bins in
Jamshedpur
✓ E-Rickshaws are used for collection which ensures a lower carbon footprint
Q2 & H1FY23 Earnings Presentation
20
Social
Social | H1 2023 Highlights
SOCIAL
At RKFL, our approach to our social pillar is three-pronged :
Rewarding workplace
100% employees trained on ESG by 2023.
1. REWARDING WORKPLACE We value a diverse workforce and work towards creating a healthy workplace where talent is developed, recognized and rewarded.
2. EMPOWERED COMMUNITY We place the welfare of the community at the heart of including assurance of highest quality & safety of the end products.
the operations
are
also
3. VALUABLE PARTNERSHIPS building We Sustainable Supply Chains through effective management, s upplier audits and deepening supplier relationships.
committed
to
An engaged and aware workforce can help us achieve our ESG commitments as we embark on this journey.
ESG Capacity Building Across RKFL Plants
In the month of October, Ramakrishna Forging held a plant-wide online ESG Awareness Workshop to educate about and engage employees Environmental, Social and Governance topics. The interactive session introduced the ESG landscape , best practices among peers and RKFLs ESG strategy and initiatives.
across
levels
all
United Nations Sustainable Development Goals
Elements of our work impact each of the SDGs, but we focus our efforts on those which have the most material current and potential impact. Within this document we indicate where activity aligns with specific SDGs, although this is not exhaustive.
Empowered Community
Increase Employee Volunteering to 55% by 2030.
are
our
today
Employees biggest Brand ambassadors. Employee Volunteering has been part of DNA from the beginning. We identify opportune initiatives in our local Communities the support of people.
Outcome
Initiatives Implemented
Blood Donation
679 bottles of Blood donated to blood bank by RKFL Plant employees
Access to Healthcare
Medical Camp set up in Baliguma for the local community
Q2 & H1FY23 Earnings Presentation
21
Robust Governance
Robust Governance| H1 2023 Highlights
ROBUST GOVERNANCE
Effective Corporate Governance Structure
As an organization we at RKFL are Committed to following an effecrive governance model with a focus on business integrity to achieve business and our ESG goals.
In 2022, we committed to :
ESG Working Committee to help integrate ESG across the organization.
Chaitanya Jalan, Executive Director is the Sponsor for ESG at RKFL, ensuring Board Oversight.
an
Effective
Institute Governance structure addressing as topics effectiveness, pay parity, tenure, etc.
board
such
composition,
Corporate
Deploy a Risk Management Framework covering all potential business & sustainability risks and having in place according mitigation measures.
Q2 & H1FY23 Earnings Presentation
Cross Functional ESG Working Committee
RKFL recognizes that ESG cannot be integrated within an organization by a separate team. It needs a cross leaders to help deliver these functional set of initiatives and integrate ESG into its organization. Hence today a cross function of leaders from Sales, HR, Company Secretary, Plant Operations, Marketing and Procurement are part of the ESG working committee. Mr. Lalit Khetan oversees this Committee.
United Nations Sustainable Development Goals
Elements of our work impact each of the SDGs, but we focus our efforts on those which have the most material current and potential impact. Within this document we indicate where activity aligns with specific SDGs, although this is not exhaustive.
Building effective policies and strengthening our outreach.
We will be revamping our critical company policies by the end of this year and have established a communication Strategy to raise awareness on ESG across our stakeholders.
Outcome
Initiatives Implemented
Refreshing Policies
We have refreshed our Anti Bribery and Anti-Money Laundering Policies
New Policies Upcoming
Human Rights Policy is being introduced this year
Targeted Communicati ons
Our new communication strategy will ensure consistent engagement across our stakeholders and help in for long term relationships and externally.
internally
22
Q2 & H1 FY23 EARNINGS CALL
SCHEDULED ON: THURSDAY, OCTOBER 27, 2022 AT 16:30 HOURS INDIA TIME
PRE-REGISTRATION LINK
CLICK HERE TO JOIN THE CALL
Q2 & H1FY23 Earnings Presentation
23
Safe Harbor
THIS PRESENTATION (IS NOT AN OFFER TO SELL ANY SECURITIES OR A SOLICITATION TO BUY ANY SECURITIES OF RAMKRISHNA FORGINGS LIMITED (THE “COMPANY”) OR ITS SUBSIDIARIES (TOGETHER WITH THE COMPANY,THE “GROUP’) The material that follows is a Presentation of general background information about the Company’s activities as at the date of the Presentation or as otherwise indicated. It is information given in summary form and does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation has been prepared by and is the sole responsibility of the Company. By accessingthis Presentation, you are agreeing to be bound by the trading restrictions. It is for general information purposes only and should not be considered as a recommendation that any investor should subscribe to or purchase the Company’s equity shares or other securities. This Presentation includes statements that are, or may be deemed to be, “forward looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”,“ estimates”,“ anticipates”,“ projects”,“ expects”,“ intends”,“ may”,“ will”,“ or “ or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Presentation and include statements regarding the Company’s intentions, beliefs or current expectations concerning, amongst other things, its results or operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The factors which may affect the results contemplated by the forward-looking statements could include, among others, future changes or developments in the Group’s business, (the Group’s regulatory and competitive environment, and ( political, economic, legal and social conditions in India or the jurisdictions in which our Group operates. Forward looking statements are not guarantees of future performance including those relating to general business plans and strategy of the Company, its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. No representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts, if any, are correct or that the objectives of the Company will be achieved There are some important factors that could cause material differences to Company’s actual results. These include our ability to successfully implement our strategy, changes in regulatory norms applicable to the Company, changes in technology, investment income, etc. The Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this Presentation, unless otherwise specified is only current as of the date of this Presentation. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this Presentation, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. The Company may alter, modify or otherwise change in any manner the content of this Presentation without obligation to notify anyperson of such revision or changes. This document is just a Presentation and is not intended to be and does not constitute a “ or “offer document” or a “private placement offer letter” or an “offering memorandum” or an “ or a solicitation of any offer to purchase or sell any securities. It is clarified that this Presentation is not intended to be a document offering for subscription or sale of any securities or inviting offers from the Indian public (including any section thereof) or from persons residing in any other jurisdiction including the United States for the subscription to or sale of any securities including the Company’s equity shares. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. This document has not been and will not be reviewed or approved by a regulatory authority in India or by any stock exchange in India. This document and its contents should not be forwarded or delivered or transmitted or disseminated in any manner to any person other than its intended recipient and should not be reproduced or copied in any manner whatsoever.
Q2 & H1FY23 Earnings Presentation
24
THANK YOU
COMPANY :
Ramkrishna Forgings Limited CIN: L74210WB1981PLC034281
Mr. Lalit Kumar Khetan Whole Time Director & CFO E: lalit.khetan@ramkrishnaforgings.com
www.ramkrishnaforgings.com