Buy Rama Steel Tubes; target of Rs 225: Share India

Share India's research report onRama Steel Tubes

Rama Steel in its JV - Pir Panchal Construction Pvt Ltd. (PPCPL) – wherein it holds 25% stake - has won orders worth INR 2,880mn for supply and erection of transmission lines for rural electrification. The order has been awarded by Uttarakhand Power Corporation Ltd. and Himachal Pradesh Electricity Board. Orders are stated to be executed in next 24 months.

Outlook

We expect better results from the company in future and FY18E/19E EPS of INR 9.5 and INR 12 respectively. We recommend a BUY on the stock with our price target of INR 240 (20x FY19E EPS).

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