Sharekhan's research report on Ratnamani Metals and Tubes
Q1 PAT of Rs. 106 crore (down 22%/45% y-o-y/q-o-q) was 25% below our estimate due to lower realizations as an impact of passing on the falling raw material prices. OPM was dropped by 370 bps and was affected by the lower execution of export SS orders, which are scheduled to be executed in the coming quarters. Order book was up by 16% q-o-q to Rs. 2,940 crore.
Outlook
Strong balance sheet and dominant domestic position in the steel tubes & pipes segment makes it well-placed to capture medium to long-term growth opportunities from oil & gas and the water supply segment. We downgrade to Hold due to limited upside on the rich valuations with a revised PT of Rs. 3,832. Stock trades at 42x FY26 EPS and 21x FY26 EV/EBITDA.
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