31 December 2022
RK Forgings, HCC Stocks Top Picks For 2023 Amid Emerging Opportunities, Says U.R. Bhat Of Alphaniti Fintech
Company Name: RK Forgings
CMP: Rs 234
Market cap: Rs 2,534 crore
Ramkrishna Forgings is a three-decade-old company that has achieved commendable progress over the years and has now become one of the major players in the fragmented forgings industry. The company gave the best-in-class performance over the last decade with a compounded annual growth rate (CAGR) of around 16 per cent in revenue and 24 per cent in profit, with a solid 20 per cent-plus return on equity (ROE) currently.
Industry Dynamics
While the robust growth achieved hitherto was by largely servicing the automobile industry, a structural change in the sector with the gradual shift towards electric vehicles (EVs) is a potential challenge as the need for forged components would greatly reduce. The number of moving parts in EVs is minimal as compared to conventional vehicles.
The thrust towards infrastructure...