Ramkrishna Forgings (RKFL) is making significant strides in the global commercial vehicle sector with its latest innovations and global expansion efforts. In this interview with N. Balasubramanian, RKFL’s Executive Directors Mr. Chaitanya Jalan and Mr. Milesh Gandhi jointly talk about RKFL’s focus at the IAA Transportation show, new product launches, the importance of global platforms for Indian suppliers, and the company’s performance and future outlook.
What is RKFL’s focus at this year’s IAA Transportation show? What will be your main communication at the fair?
This year, at the 2024 IAA Transportation show, RKFL’s focus is on showcasing its cutting-edge innovations in commercial vehicle technology. As a leading manufacturer of automobile components, RKFL is set to make a significant impact by unveiling new ventures in producing forged, extruded, ring rolled, cold forged, casted, and machined components, aiming to revolutionize current practices. Central to RKFL’s communication strategy will be a strong emphasis on sustainability and efficiency—two cornerstones that drive the company’s adoption of world-class technology. This includes advancements in casting, ready-to-assemble non-driven trailer axles, and both warm and cold forgings.
Attendees can look forward to RKFL’s display of various components, including hot, warm, and casted components for powertrains. These innovations promise unprecedented levels of cost savings, environmental responsibility, and safety for commercial transportation. Beyond the component displays, RKFL will highlight its commitment to sustainability, addressing the changing business environment due to “Net Zero” requirements. With a focus on the evolving needs of the commercial vehicle market, RKFL aims to make a lasting impression at the IAA Transportation show, solidifying its position as an industry trailblazer.
Any new product launches or offerings from RKFL for the global market at the show?
RKFL will unveil an exciting lineup of new product launches and offerings at the show, designed to captivate and delight customers worldwide. Leveraging their extensive capabilities in forging and casting, the company’s innovation teams have crafted a diverse array of cutting-edge products to meet global consumer needs.
Headlining RKFL’s new product showcase is their latest display of non-driven trailer axles, fully assembled with in-house manufacturing capabilities. These axles offer unparalleled precision, efficiency, and reliability. Additionally, RKFL will introduce a range of advanced warm forging differential components, combining experience and technology for high-engineered products suitable for commercial vehicles, passenger cars, farm equipment, and driven axles.
Overall, RKFL’s diverse new product displays and offerings at the global trade show underscore the company’s commitment to innovation and customer-centricity. As the automotive landscape evolves, RKFL’s latest introductions position the brand as a trusted partner offering thoughtfully designed, technologically advanced, and environmentally conscious products.
How important do you think the IAA platform is for quality suppliers from India to gain access and reach OEM and Tier-I customers from around the globe?
RKFL’s presence at the IAA Transportation event is a significant milestone as one of the few home-grown Indian companies to make an impact on this global stage. This platform is invaluable for quality suppliers from India, offering them a rare opportunity to engage directly with OEMs and Tier-I customers worldwide.
For Indian companies, entering the competitive global automotive supply chain can be challenging. However, events like IAA Transportation bridge this gap by showcasing products, services, and capabilities to an international audience of industry leaders and decision-makers. Indian suppliers can forge crucial connections, negotiate deals, and demonstrate their engineering talent and manufacturing expertise.
This elevated exposure helps lesser-known Indian firms raise their profile, build credibility, and emerge as viable partners for major global automakers and system integrators. Additionally, the IAA platform allows Indian companies to benchmark themselves against world-class competitors, learn best practices, and gain insights to enhance their offerings. Overall, the significance of this event for quality Indian suppliers is immense, representing a unique chance to compete on the global automotive stage.
How is your export market business faring? What percentage of your business comes from outside India, and what are your plans for further expansion?
RKFL’s export and global market business has shown steady growth in recent years. The company has successfully leveraged its strong brand recognition and reputation for quality to expand beyond the Indian domestic market. Currently, international sales account for approximately 49% of RKFL’s overall business, with a presence in over 23 countries across Asia, Europe, and the Americas. This global footprint has been a key driver of RKFL’s impressive financial performance, as demand for its premium products continues to rise in various overseas markets.
To capitalize on favorable global trends, RKFL is pursuing an internationalization strategy that includes establishing new sales and manufacturing footprints, opening global offices and logistics centers, and investing in targeted marketing campaigns to raise brand awareness. The company is particularly focused on high-growth markets such as Europe, America, Southeast Asia, and Latin America, where significant untapped opportunities exist. With a robust product pipeline, a customer-centric business model, and a seasoned management team, RKFL is well-positioned to increase its share of global revenues in the coming years.
How was business for RKFL in FY23-24? How has the first half of the current fiscal year been? What are your expectations and outlook for the rest of the year?
In the fiscal year FY23-24, RKFL demonstrated commendable performance, with revenue from operations rising by 16.28%. Export sales experienced a notable increase of 19.10%, EBITDA grew by 21.61%, and profit after tax (PAT) surged by 38.40% compared to the previous year.
In contrast, the production of the commercial vehicle (CV) segment grew by only 3%, with the medium and heavy commercial vehicle (MHC&V) sector experiencing a growth of just 3.5%.
The first quarter of FY24-25 has also been strong. Revenue from operations increased by 4%.
The company has secured new orders amounting to INR 526 crores from North America and INR 287 crores from Europe. In India, the order inflow was INR 442 crores from the CV sector and INR 284 crores from the railway sector.
RKFL’s profitability has improved due to disciplined cost management and strategic pricing measures contributing to margin expansion.
Looking ahead, RKFL’s leadership is optimistic that this upward trend will continue throughout the remainder of the fiscal year. The company highlights a strong pipeline of new business prospects, sustained strength in core product categories, and ongoing operational improvements. Despite macroeconomic uncertainties, RKFL is strategically positioned to leverage favourable demand trends and reinforce its status as a leading industry player. Provided there are no unexpected challenges, RKFL is set to achieve a robust full-year performance, surpassing its initial FY23-24 targets.
In the first quarter of fiscal year 2024-2025, the Board of Directors approved the acquisition of Resortes Libertad, S.A. de C.V. in Mexico. This acquisition represents a crucial step in RKFL’s strategic growth, with plans to launch machining operations in the third quarter of fiscal year 2025.
These advancements reinforce RKFL’s commitment to expanding its international presence, diversifying its business portfolio, and achieving sustainable growth. The company is confident that these strategic initiatives will position it for ongoing success and create lasting value for stakeholders.
At Ramkrishna Forgings, we are prepared to seize growth opportunities by leveraging our strengths in innovation, operational excellence, and strategic partnerships. We are confident in our ability to adapt, innovate, and create value for our stakeholders while making a positive impact on the industry and society.