Milind Pradhan of UTI Securities is of the view that Ratnamani Metals & Tubes has target of Rs 630.
Pradhan told CNBC-TV18, "Ratnamani Metals & Tubes is in stainless steel tubes and carbon steel pipes. These are supplied to high growth industry like refinery, petrochemicals, and power generation. What is peculiar about this company is that for the next five years we expect that return on equity from this company would be about 38%."
He further added, "They have recently completed their expansion in their Kutch plant and they have doubled their capacity. Stainless steel tubes capacity has gone up to 14,360 tonne and a carbon steel pipes capacity has gone up to 3 lakh tonne and we are very confident for next five years. Their gross profit margins would be more than 20% and net profit margin would be more than 11%. Their EPS next year should be about Rs 61 and in FY08 should be about Rs 73. This company is available at about seven times 07 and six times 08. This is the cheapest stock that is available in capital goods sector and we have a price target of Rs 630."
