Monarch Networth Capital expects Ramkrishna Forgings' expansion across passenger vehicles (PVs), railways, oil and gas, exports and value-added products to support its next phase of earnings growth. The brokerage also highlighted improving utilisation of existing manufacturing facilities and the completion of the company's capital expenditure cycle as key factors that could strengthen operating leverage and reduce debt.
The brokerage projects Ramkrishna Forgings to report a 20% compound annual growth rate (CAGR) in revenue, a 30% CAGR in EBITDA and a 102% CAGR in adjusted profit after tax (PAT) between FY26 and FY29. It expects EBITDA margins to expand from 15.2% in FY26 to 19.5% by FY29.
Monarch Networth Capital has valued the stock at 27 times its estimated September 2028 earnings per share (EPS), arriving at a target price of ₹806 per share. The valuation reflects the company's growth prospects while accounting for return ratios that are still normalising compared with higher-return forging peers.
Ramkrishna Forgings Expands Beyond Commercial Vehicles
According to Monarch Networth Capital, Ramkrishna Forgings' growth drivers are increasingly extending beyond its traditional medium and heavy commercial vehicle (M&HCV) business.
The company has a forging capacity of 333,400 metric tonnes (MT) and a casting capacity of 78,600 MT. The brokerage highlighted new passenger vehicle and metro railway orders secured in Q1FY27, alongside increasing exposure to aluminium forgings, oil and gas applications, stainless steel and high-strength alloys.
Expansion into new products and applications, including electric vehicles and aerospace, could help the company broaden its addressable market. It could also generate growth through new programme wins and a higher share of customer business, reducing reliance on commercial vehicle demand alone.
Geographical diversification is another important growth driver. Monarch Networth Capital noted that Europe currently accounts for more than 40% of the company's exports. It expects this share to normalise to around 30–40% as exports to the US recover.
The brokerage added that export margins are typically 2–3 percentage points higher than domestic margins. A recovery in overseas demand could therefore support both revenue growth and profitability.
Railway Business Emerges as a Key Growth Opportunity
Monarch Networth Capital expects the railway business to become a significant contributor to Ramkrishna Forgings' growth, with opportunities across safety-critical components, fully assembled bogies and its 51%-owned Ramkrishna Titagarh Rail Wheels (RTWL) joint venture.
According to the brokerage, railways contributed 7.5% of the company's standalone revenue in FY26, compared with 4.6% in FY25.
The existing railway components business benefits from sustained rolling-stock production by Indian Railways. The commencement of bulk bogie-assembly supplies has also opened up an annual addressable market of more than ₹2,000 crore, the report said.
The company has begun supplying bogies for the Vande Bharat Sleeper train and fulfilling development orders from Indian Railways.
The RTWL joint venture offers an additional growth opportunity through domestic wheel manufacturing and import substitution. Monarch Networth Capital highlighted an annual Indian Railways offtake commitment of 80,000 wheels, alongside the potential to expand into export markets.
The brokerage expects Ramkrishna Forgings' railway revenue to grow at a CAGR of 27% between FY26 and FY29. It also expects the wheel joint venture to become a meaningful contributor to profit through the equity method.
Higher Capacity Utilisation to Drive Operating Leverage
Monarch Networth Capital believes Ramkrishna Forgings' next phase of expansion will depend less on adding fresh capacity and more on improving utilisation of its existing manufacturing facilities.
The brokerage expects forging capacity utilisation to increase from 58% in FY26 to 88% by FY29. Casting utilisation is projected to rise from 42% to 90% over the same period.
These improvements are expected to support sales volume growth of around 18% annually between FY26 and FY29. EBITDA is projected to grow faster, at a CAGR of 30%, as higher volumes improve fixed-cost absorption and a richer product mix supports margins.
The brokerage expects a rising contribution from exports, value-added castings, aluminium and cold forgings, along with higher machining intensity, to further improve profitability.
The completion of the major capital expenditure cycle is also expected to help Ramkrishna Forgings reduce debt and interest costs, supporting an improvement in its return ratios.
Valuation Outlook and Investment Risks
Monarch Networth Capital believes the company's diversification, railway opportunities and operating leverage provide a strong earnings growth outlook. However, it continues to value Ramkrishna Forgings at a discount to forging peers with higher return ratios because its return on equity and return on capital employed are still normalising.
The key risks to the investment thesis include a slower-than-expected recovery in exports, delays in ramping up railway operations and the wheel joint venture, and lower-than-expected capacity utilisation or margin expansion.
Ramkrishna Forgings Share Price Today
Ramkrishna Forgings shares opened at ₹694 apiece on the BSE today. The stock touched an intraday high of ₹702.60 per share and an intraday low of ₹683.60 per share.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said Ramkrishna Forgings had been consolidating in the ₹659–741 range since 4 September.
The stock's 20-day and 50-day exponential moving averages (EMAs) have flattened on the daily chart, indicating a sideways trend. The Average Directional Index (ADX) has also flattened, suggesting a lack of directional momentum and subdued volatility.
However, Shah noted that the broader trend remains bullish, with the stock trading above key moving averages on the weekly chart. A decisive breakout above or below the consolidation range will provide further directional cues for the stock.
With diversification beyond commercial vehicles, expanding railway operations and higher capacity utilisation forming the core of its growth outlook, Ramkrishna Forgings' ability to deliver projected earnings growth will remain central to the brokerage's investment thesis, alongside the execution risks associated with exports, railway operations and margin expansion.
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