Ramkrishna Forgings Ltd, a leading supplier to the automotive sector, has uncovered discrepancies in inventory that could dent the company’s net worth by as much as 5%. The company has launched an external audit to investigate. The management has pledged to mitigate any financial blow.
The discrepancy came to light in an annual physical verification of inventory undertaken for FY2025.
Ramkrishna Forgings said: "While the physical verification process is continuing, as per the internal estimates of the company, a likely adverse impact of the order of 4% to 5% of the net worth of the Company is indicated."
The audit committee meeting of the company on Saturday approved the appointment of external agencies to conduct a joint fact-finding study for the discrepancy and the reasons thereof
"On the basis of the final joint report by the independent external agencies, the
company will appropriately account the impact in its Financial Statements on a one-time basis."
Ramkrishna Forgings management stated that this was the first ever such incident in its history. Further, in order to mitigate the potential adverse impact assessed upon conclusion of the factfinding study, the promoters assuranced that they intend to fund the same through permissible instruments as permitted under applicable laws.
Ramkrishna Forgings is into manufacturing of forged and computer numerical control machined components for the various sectors including automobile, railways, defence and mining sectors. In the automotive sector, the company supplies components such as transmission, and axles including gear box, pinion, spindles, bearing rings, shafts, crown wheel among others.
The company boasts around 18 manufacturing plants in the country, with a total consolidated installed capacity of 3,06,000 metric tonnes. The company's major revenue generations happens from the medium and heavy commercial vehicles sector, with Tata Motors being its largest customer.
Ramkrishna Forgings got into a spate of acquisitions in FY2024, helping it to diversify its revenue base by adding new customers and components in segments including passenger vehicles, tractors and light commercial vehicles.