Sharekhan's research report on Ratnamani Metals and Tubes
Robust Q2 was led by superior order execution and a 555 bps y-o-y rise in margins that drove 66% y-o-y increase in consolidated PAT to Rs. 164 crore (43% above estimate). Sharp rise in OPM was led by favourable product mix and execution of certain exceptional orders. Order book remains strong at Rs. 2975 crore. Standalone revenue/EBITDA margin guidance stood at Rs. 4,500-5,000 crore/16-18% for FY24. Capex of Rs. 350 crore for CS/SS plant to drive the next leg of growth. JV with Technoenregy AG to provide new growth avenue.
Outlook
Strong balance sheet and dominant domestic position in steel tubes & pipes makes it well placed to capture medium to long-term growth opportunities from oil & gas and the water supply segment. Hence, we maintain a Buy with a revised PT of Rs. 3,500. Stock trades at 31x/27x its FY25E/FY26E EPS.
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Ratnamani Metals & Tubes - 04 - 10-2023 - khan