Ramkrishna Forgings Q4 FY26: margins jump, capex peaks, and the next phase begins

Ramkrishna Forgings ended Q4 FY26 with a sharp improvement in profitability, even as FY26 remained a year shaped by heavy commissioning-led capital spending. On a consolidated basis, the company reported Q4 FY26 revenue (excluding other income) of INR 1,216.78 crore, up 28% year on year and 11% quarter on quarter. EBITDA for the quarter rose to INR 208.19 crore and the EBITDA margin expanded to 17.1%.

Management framed the quarter as a period where business conditions improved meaningfully, domestic demand stayed robust across key segments, and exports showed recovery after earlier volatility. It also highlighted that railways has become a meaningful contributor alongside oil and gas, off-highway, and mining, reinforcing the diversification push away from a purely commercial-vehicle-led profile.

Q4 performance shows operating leverage at work

The quarter stood out for margin expansion. On a consolidated basis, EBITDA margin improved from 14.9% in Q3 FY26 to 17.1% in Q4 FY26. Profit before tax for the quarter reached INR 64.33 crore compared with INR 29.69 crore in Q3 FY26.

The presentation notes that Q4 FY26 consolidated PBT was impacted by INR 10.4 crore due to elimination of profits from subsidiaries and a loss from the Mexico subsidiary. Even with that adjustment, the sequential improvement was material.

On the standalone side, Q4 FY26 revenue (excluding other income) was INR 1,077.85 crore and EBITDA margin expanded to 17.2%. Standalone domestic revenues grew strongly, with domestic markets at INR 752.08 crore in Q4 FY26 versus INR 493.46 crore in Q4 FY25.

Financial summary (as reported)

Note: Revenue and EBITDA figures are presented excluding other income, consistent with the company’s KPI disclosure. Amounts are in INR crore, converted from INR lakhs.

Revenue mix tilts further toward domestic and railways

A key strategic shift visible in the presentation is the rising share of domestic revenue. In FY26, standalone domestic contribution increased to 68.4% from 59.2% in FY25. Within domestic, auto remains the largest bucket, but railways expanded to 7.5% of standalone revenue in FY26 versus 4.6% in FY25.

Exports, however, fell in FY26. Standalone export revenue declined 20% year on year, with North America’s share reducing and Europe becoming a larger part of the export mix. The export geography split table shows FY26 exports of INR 1,186.55 crore, of which North America was 58.0% and Europe was 41.3%.

The company described export demand as recovering, notwithstanding tariff-related developments and recent geopolitical disruption. But the FY26 numbers still reflect a year where domestic growth was the bigger support.

Orders and capacity set up the FY27 execution cycle

Order wins remained a major theme. In Q4 FY26, the company secured new orders worth INR 594 crore with a program life of four years. Of this, 56% was automotive and 44% non-automotive. Management also highlighted that non-auto orders in Q4 were largely energy-led.

For the full year FY26, standalone new orders were INR 3,074 crore, and the company provided a ramp-up schedule for new orders over FY27 to FY30 totaling INR 9,935 crore.

On capacity, the presentation positions FY27 and beyond as the phase for sweating newly commissioned assets. It states that over the last four years, the company invested INR 3,676 crore across forging, casting, machining, and growth platforms. It also highlighted commissioning and additions in Q4 FY26, including forging and casting capacity additions.

This matters because FY26 cash flows reflect that capex intensity. The cashflow snapshot for FY26 shows net capex of INR 879 crore and a net cash outflow of INR 180 crore. Closing net debt (net of cash) increased to INR 2,172 crore, though the company also presented a net debt figure adjusted for bill discounting of INR 1,990 crore.

Subsidiary and JV updates: rail wheels and Mexico

Two operating updates stand out as near-term catalysts for capacity monetisation.

First, the rail wheel joint venture with Titagarh Rail Systems. The consortium has received an LOA for manufacturing and supply of forged wheels to Indian Railways. Ramkrishna Forgings holds 51% and is the lead partner. The JV is setting up a facility in Chennai, Tamil Nadu with annual capacity of 228,000 forged wheels. The project cost is stated as INR 2,000 crore, funded through debt and equity, with INR 480 crore of equity infused as of 31 March 2026. The company expects commercial operations to commence by end of June 2026.

Second, the Mexico facility, now operating as Ramkrishna Forgings Mexico S.A. de C.V. Machining and warehousing operations have commenced in Monterrey. Trial production has started and PPAP approvals were received, with bulk commercial production expected from the second week of May (context: May 2026).

Both projects are framed as building blocks for the next phase, but they also carry execution risk in commissioning and ramp-up.

What investors should track next

The Q4 margin expansion indicates operating leverage as demand improved and assets scaled. But FY26 results also show the impact of higher depreciation and finance costs from the investment phase. Finance costs rose to INR 210.35 crore in FY26 consolidated, and consolidated PBT before exceptional items declined to INR 112.58 crore from INR 148.79 crore in FY25.

Management’s stated priorities for FY27 and beyond revolve around utilisation ramp-up, richer product mix, and deleveraging over the next 2 to 3 years. The balance between growth and balance-sheet repair will likely drive investor perception as much as topline growth.

The near-term milestones are clear and time-bound: the rail wheel JV expects hot trials in early May 2026 with commercial operations by end of June 2026, and the Mexico facility expects bulk production from the second week of May. If these ramps proceed as planned, they would support the company’s stated goal of stronger cash generation and improving return ratios as the heavy capex phase ends.