Ramkrishna Forgings extends rally for second day, shares jump 5% on bagging $220 million supply contract

Ramkrishna Forgings Ltd shares gained more than 5% in intraday trade on Tuesday after the company announced securing a supply contract worth $220 million in North America.

The contract marks Ramkrishna Forgings' entry into a new vertical within the forgings sector, the company said in a filing to the stock exchanges. The leading supplier of forgings items for railway coaches and wagons said that the order pertains to supplying Tier 1 customers in the light vehicle segment across North America, spread over 10 years.

After the announcement, shares of RK Forgings Ltd jumped as much as 5.46% to an intraday high of ₹787 per share on the NSE, extending the gain for the second straight day. However, the stock pared some gains and closed at ₹760 apiece, up 1.84%.

The new contract will expand the company's presence in the North American market and contribute to the development of a robust supply chain in the automotive industry, Ramkrishna Forgings informed the stock exchanges.

“Securing this substantial contract is a testament to our relentless pursuit of excellence, customer-first approach and our dedication to delivering exceptional products and services. We are honoured to collaborate with our esteemed Tier 1 customer and are fully committed to delivering superior quality forgings that drive value and innovation in the North American Light Vehicle segment," said Lalit Kumar Khetan, Whole Time Director and CFO, Ramkrishna Forgings.

Khetan added that the new contract will enable the company to further strengthen its position in the automotive industry while also exploring avenues for growth and expansion.

This is the second such major contract for the company in February. Earlier, on February 5, the company bagged a $13.16 million contract from a leading axle manufacturer in North America. As part of the deal, the company will be supplying real axle components and services for the off-highway sector over the next four years.

Incorporated in 1981, Ramkrishna Forgings Ltd is one of the largest players in the casting and forgings sector. The company, with an annual production capacity of 2,20,000 tons of forgings, has a presence in five countries.

Ramkrishna Forgings is a supplier to brands like TATA Motors, VE Commercial, Daimler and Ashok Leyland, in India and to Volvo, Mack Trucks, Iveco and Ford in the overseas markets.