Ramkrishna Forgings Limited — Credit Ratings, 26-06-2025: Credit Rating- Others

Crisil Ratings has placed Ramkrishna Forgings Limited’s long-term bank loan and short-term commercial paper ratings on Watch Negative, while reaffirming the ratings at ‘Crisil AA’ and ‘Crisil A1+’ respectively. This follows the uncovering of inventory discrepancies resulting in a net loss of about Rs 203 crore (6.73% of net worth), leading to restatement of financials and a drop in operating margin to 13.9% for fiscal 2025. Elevated capex and working capital intensive operations caused consolidated debt to rise sharply to Rs 2013 crore and net debt/EBITDA to exceed 3.5 times, weakening credit metrics. The company plans a Rs 205 crore preferential fund raise to offset losses. The rating watch reflects risks from operational weaknesses and financial strain, potentially impacting borrowing costs and investor confidence if corrective measures delay or falter.