Ramkrishna Forgings shares hit 52-week low, fall 12%; here's why

Shares of Ramkrishna Forgings (RK Forgings) plummeted 12% to a 52-week low on Monday following the identification of inventory discrepancies during their annual physical verification process for the financial year ending 31 March 2025. This marks the first occurrence of such discrepancies in the company's history. The stock had previously fallen below its earlier low of ₹604.50 recorded on March 3, 2025. Over the past two days, RK Forgings' stock has declined by 16% and has decreased by 33% from its last month's peak of ₹862.05 on 24 March 2025. Previously, the stock reached a 52-week high of ₹1,064 on October 15, 2024.

RK Forgings' shares were trading 5.36% lower at ₹614.10. Average trading volumes on the stock increased nearly fourfold. A total of 4.5 million equity shares were exchanged on the NSE and BSE. The company, in an exchange filing, stated: "During the course of Annual Physical Verification of Inventory undertaken by the Company for the financial year ended 31 March, 2025, which commenced from 6 April, 2025, it was observed that there have been discrepancies in certain cases of inventory."

The recent developments have led to significant attention on RK Forgings within the market, as this discrepancy could have broader implications for the company's financial health and stock performance. Competitors in the auto components sector will be closely monitoring the situation to gauge any potential shifts in market dynamics. The stock's recent drop reflects investor concerns, and market analysts will likely scrutinise future corporate filings for further insights. It remains crucial for RK Forgings to address these discrepancies promptly to restore investor confidence and maintain its market position.

"We wish to inform you that the Audit Committee Meeting of the Company at its meeting held today, i.e. 26 April, 2025, has approved the appointment of reputed Independent External Agencies to conduct a joint fact-finding study for the discrepancy in Inventory and reasons thereof . During the course of Annual Physical Verification of Inventory undertaken by the Company for the Financial Year ended 31 March, 2025, which commenced from 6 April, 2025, it was observed that there have been discrepancies in certain cases of inventory. The decision to make the aforesaid appointment has been taken by the Audit Committee in the interest of ensuring transparency, accountability and adherence to the highest standards of Corporate Governance and to mitigate future recurrence of such nature," said RK Forgings.