Ramkrishna Forgings share price has surged over 34% in 2026 so far. Monarch Networth Capital has initiated coverage on the stock with a ‘Buy’ rating and a target price of ₹806 per share, implying an upside potential of around 18% from the prevailing market price. In its initiation report, the brokerage cited the company’s business diversification, expanding railway opportunities and improving capacity utilisation as key drivers of future earnings growth.
The brokerage expects the company’s expansion across passenger vehicles (PVs), railways, oil and gas, exports and value-added products to support its next phase of earnings growth. It also sees improving utilisation of the company’s existing manufacturing facilities and the completion of its capital expenditure cycle as key drivers of operating leverage and debt reduction.
Monarch Networth Capital projects Ramkrishna Forgings to report a 20% revenue CAGR, 30% EBITDA CAGR and 102% adjusted profit after tax (PAT) CAGR between FY26 and FY29. It expects EBITDA margins to expand from 15.2% in FY26 to 19.5% by FY29.
The brokerage 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 factoring in its return ratios, which are still normalising relative to higher-return forging peers.
Diversification 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 casting capacity of 78,600 MT. The brokerage highlighted new passenger vehicle and metro railway orders secured in Q1FY27, alongside rising exposure to aluminium forgings, oil and gas applications, stainless steel and high-strength alloys.
The expansion into new products and applications, including electric vehicles and aerospace, could help the company increase its addressable market and generate growth through new programme wins and a higher share of customer business, rather than relying solely on commercial vehicle demand.
Geographical diversification is another important growth lever. Monarch Networth Capital noted that Europe currently accounts for more than 40% of the company’s exports, a share it expects 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.
Railways business offers a less cyclical growth opportunity
Monarch Networth Capital sees the railway business emerging as 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.
Railways contributed 7.5% of the company’s standalone revenue in FY26, up from 4.6% in FY25, according to the brokerage.
The existing railway components business benefits from sustained rolling-stock production by Indian Railways. Meanwhile, the commencement of bulk bogie-assembly supplies opens up an annual addressable market of more than ₹2,000 crore, the report said.
The company has also begun supplying bogies for the Vande Bharat Sleeper train and fulfilling Indian Railways development orders.
The RTWL joint venture provides an additional 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 27% CAGR between FY26 and FY29, with the wheel joint venture becoming a meaningful contributor to profit through the equity method.
Higher capacity utilisation could drive earnings growth
Monarch Networth Capital believes the next phase of expansion will depend less on adding fresh capacity and more on improving utilisation of the company’s existing manufacturing base.
It expects forging capacity utilisation to increase from 58% in FY26 to 88% by FY29, while casting utilisation is projected to rise from 42% to 90%.
This is expected to support sales volume growth of around 18% annually over FY26–FY29. EBITDA is projected to grow faster, at a 30% CAGR, as higher volumes improve fixed-cost absorption and a richer product mix supports margins.
The brokerage expects increasing export contribution, value-added castings, aluminium and cold forgings, and 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, thereby supporting an improvement in return ratios.
Valuation and risks
The brokerage believes the company’s diversification, railway opportunities and operating leverage offer a strong earnings growth outlook. However, it continues to value the company at a discount to forging peers with higher return ratios, given that its return on equity and return on capital employed are still normalising.
Key risks to the investment thesis include a slower-than-expected recovery in exports, delays in the ramp-up of railway operations and the wheel joint venture, and lower-than-expected capacity utilisation or margin expansion.
Ramkrishna Forgings share price today
Ramkrishna Forgings share price today opened at 694 apiece on the BSE, 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 has 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. Meanwhile, 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.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
