Tuesday, August 09, 2005

Probable acquisition by M&M has Ramkrishna Forging forging ahead

Ramkrishna Forging is currently up 5.25% to Rs 96.4 on volumes of 3.71 lakh shares.

The stock is currently exhibiting volatility, having hit an intra-day high of Rs 100.9 (a new all time high). It also hit an intra-day low of Rs 92.5.

The stock gained sharply form Rs 78.55 on 27 July 2005 to close at Rs 91.65 yesterday following the news of the acquisition move.

There are reports in the print media that M&M is in talks to acquire a 51% stake in the Jamshedpur based Ramkrishna Forging. The management of both companies refused to comment on the development , however.

Ramkrishna Forging is also understood to be looking for a strategic partner. The Jalan family holds 55% stake in the company, while the rest is held by the public and institutions. The company has three plants, and the fourth is in the process of being commissioned. When that takes effect, the capacity will increase to 35,000 tonnes a year.

The company is an OE supplier to the Tatas. The latter accounts for 40% of the company's turnover. Exports account for 10%. The company manufactures cast iron forgings along with screw couplings, draw gear assembly, snubber assembly, hanger, block hanger side frame key and various other forgings items of railway coaches and wagon to land and air defences, thermal plants, steel plants and the mining industry.

For the quarter ended June 2005, the company posted a 31.6% rise in net profit to Rs 1.25 crore (Rs 0.95 crore). Net sales jumped 66.3% to Rs 18.43 crore (Rs 11.08 crore).



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