Ramkrishna Forgings Faces Potential 4-5% Hit To Net Worth Due To Inventory Discrepancies

Ramkrishna Forgings Ltd. may face a 4-5% reduction in its net worth due to discrepancies in inventory, according to internal findings disclosed in an exchange filing on Saturday. A quick calculation indicates that the company had a net worth of over ₹29 billion as of September 30, suggesting a potential loss of ₹1.2 billion-₹1.5 billion.

For the nine months ending December, the company reported a consolidated net profit of ₹3.70 billion. In the 2023-24 April-March), its consolidated net profit stood at ₹3.41 billion.

The discrepancies were uncovered following an internal audit for 2024-25. After this audit, Ramkrishna Forgings plans to engage independent external agencies to conduct a joint study into the inventory discrepancy and its causes. The company will treat the impact as a one-time cost once the joint report is complete.

The company’s promoters have committed to covering the financial impact from the inventory discrepancies through "permissible instruments." “Understanding the potential adverse effect on the company’s net worth, the promoters are firmly committed to protecting and preserving stakeholders' interests and upholding the highest standards of corporate governance,” Ramkrishna Forgings said.