Ramkrishna Forgings Q1 FY26: Profit falls 78%, revenue +6%

Key takeaway from the quarter

Ramkrishna Forgings reported a resilient top line in Q1 FY26, but profitability fell sharply as expenses rose and the export environment remained weak. Consolidated revenue from operations came in at ₹1,015 crore, up about 6% year-over-year. EBITDA improved to ₹148.6 crore and the EBITDA margin expanded 298 bps YoY to 14.6%. Despite that, profit after tax (PAT) dropped to ₹11.8 crore, down 78% YoY from ₹80.9 crore in Q1 FY25, and also fell from ₹93.9 crore in Q4 FY25.

Q1 FY26 numbers: revenue holds, profit collapses

The company reported total expenses of ₹994.9 crore in Q1 FY26, up 10.9% YoY, which weighed on earnings. Profit before tax (PBT) stood at ₹24 crore, down 81.3% YoY. EPS declined to ₹0.65 versus ₹4.50 in Q1 FY25. Management attributed the sharp profit decline to cost increases, margin pressure, and a weak global and export environment.

Volumes and utilisation snapshot

Production volume for the quarter was 44,170 tons and capacity utilisation was 69%. The utilisation figure indicates the company operated below full capacity, even as revenue grew, which is relevant when reading the cost and margin trajectory. The quarter’s performance also reflected the pressure of higher expenses, despite improved EBITDA margin versus the year-ago period.

Order book: exports lead new wins in Q1

Ramkrishna Forgings reported ₹683 crore of new orders in Q1 FY26, including ₹502 crore of export orders. The company highlighted that the export win included orders from a major American OEM. Managing Director Naresh Jalan said revenue resilience continued despite export headwinds and global macro pressures, and added that the order book remained healthy with wins across automotive, railways, and non-automotive segments.

Q4 FY25 context: weak operating quarter, PAT lifted by one-off

In Q4 FY25, consolidated revenue was ₹947.2 crore, down 3% YoY. EBITDA for the quarter was ₹98.5 crore versus ₹126.3 crore in Q4 FY24, reflecting margin pressure, with the consolidated EBITDA margin at 10.4%. Q4 FY25 PAT was ₹199.8 crore, but the company flagged that PAT was boosted by a one-off deferred tax credit related to a merger, with underlying operational profitability much lower.

The quarter also saw the impact of inventory discrepancies that the company said were addressed in FY25. It also reported higher working capital requirements and noted a 10% US duty that led to revenue deferment.

FY25 full-year scorecard and the guidance miss

For FY25, Ramkrishna Forgings reported consolidated revenue of ₹4,034.1 crore, EBITDA of ₹559.6 crore, and PAT of ₹331.6 crore. The year, however, fell short of the company’s earlier stated growth expectations. Management had repeatedly guided for 15-20% volume growth and 15-20% consolidated revenue growth for FY25, while the actual consolidated revenue growth was 9% YoY and volume growth was 4% YoY.

The company attributed part of the revenue shortfall to a 4% decrease in raw material prices impacting realisations in H1 FY25 and a ₹170 crore revenue non-recognition in Q4 FY25 due to a change in revenue recognition policy. Separately, FY25 consolidated EBITDA margin declined to 13.9% from 20.9% in FY24, while Q4 FY25 consolidated EBITDA margin fell to 10.4%.

Working capital, debt and capex: tighter balance sheet optics

The company disclosed FY25 capex of ₹976 crore in plant and equipment and ₹116 crore in the rail wheel project. Net debt rose from ₹818 crore at the start of the year to ₹1,821 crore at the end of FY25. It also reported free cash flow of ₹258 crore and a working capital change of ₹104 crore.

Management also pointed to working capital rising by about ₹400 crore in Q4 FY25 due to increased transit times (including Red Sea issues), new customer wins, and bulk supplies linked to new orders yet to commence.

Projects and diversification: rail wheel JV and North America operations

A key strategic project is the rail wheel joint venture with Titagarh Rail Systems, where Ramkrishna Forgings holds a 51% stake. The project is under construction in Chennai, with capacity planned at 2.28 lakh wheels per year and an investment of ₹2,000 crore, including ₹345 crore of equity infused. Operations are expected to begin by January 2026.

The company also cited progress in North America, with an operational plant in Monterrey where machining is underway, and orders received from a North American customer.

Market impact: what investors are likely tracking now

For investors, Q1 FY26 reinforced a key theme: revenue and order inflows are holding up, but costs and earnings volatility remain high. The steep YoY fall in PAT, the elevated expense growth, and the recent accounting and policy changes around inventory and revenue recognition are likely to keep focus on reporting quality and margin durability.

The company’s charts referenced a one-year stock performance of down 15.46%, underscoring that the market has already been cautious. Near-term profitability remains under pressure, but management has said it is optimistic about operational gains, improved efficiency, and margin recovery in the coming quarters, supported by a robust order pipeline.

Key numbers at a glance

Conclusion

Ramkrishna Forgings entered FY26 with a stronger revenue base and continued order wins, including a heavy export component in Q1 FY26. But the quarter also highlighted the extent of profit pressure from higher expenses and a challenging global backdrop. In the near term, investors are likely to track how quickly margins normalise, how the order book converts into volumes, and execution milestones such as the rail wheel project, which is expected to start operations by January 2026.