Buy Rama Steel Tubes; target of Rs 207: Khambatta Securities
Khambatta Securities is bullish on Rama Steel Tubes has recommended buy rating on the stock with a target price of Rs 207 in its research report dated 12 September 2017.
Khambatta Securities' research report on Rama Steel Tubes
Rama Steel Tubes Ltd (RST) reported a better than expected financial performance for Q1 FY18. During the quarter, net sales increased 11% y/y to Rs 729m. Q1 FY18 EBITDA increased 23% to Rs 67m (Rs 55m a year ago) while the EBITDA margin came at 7.4%. Improvement in EBITDA Margins was mainly contributed by reduced power cost. The commission of solar plant at Khopoli has reaped the benefit for the Company and has reduced its power cost. As per management, this has helped the Company to achieve operational efficiency and increase EBITDA Margin by 0.5-0.7%.
We recommend a Strong Buy on the stock with our price target of Rs 207 (21x FY19e EPS), a 27% upside.
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