Sharekhan's research report on Ratnamani Metals and Tubes
Large order win of Rs. 1,186 crore takes Ratnamani Metals & Tubes Limited’s (RMTL’s) order book to all-time high of Rs. 3,214 crore, implying a 37% rise over Q1FY23. Company won a major Rs. 800-crore order in water transportation segment with decent margin of 14-15%. Strong order book position and robust bid pipeline offer confidence on revenue growth of over 20% for FY23 and 20% CAGR over FY22-25E. Overall, we expect RMTL to post a robust 24% PAT CAGR over FY22-25E with healthy RoE/RoCE of 18%/23%. RMTL has planned new capex of Rs. 350 crore in 18-24 months for expansion of both CS/SS capacities and the same bodes well for growth beyond FY24E.
We maintain a Buy on RMTL with a revised PT of Rs. 2,285 as RMTL’s dominant domestic position makes it key beneficiary of demand recovery in steel tubes and pipes. Stock trades at 26.6x its FY2024E EPS and 22.5x its FY2025E EPS.
At 15:00 hrs Ratnamani Metals and Tubes was quoting at Rs 2,051.05, up Rs 59.50, or 2.99 percent.
It has touched an intraday high of Rs 2,099.00 and an intraday low of Rs 1,991.30.
It was trading with volumes of 4,492 shares, compared to its thirty day average of 2,083 shares, an increase of 115.67 percent.
In the previous trading session, the share closed up 0.67 percent or Rs 13.25 at Rs 1,991.55.
The share touched its 52-week high Rs 2,018.20 and 52-week low Rs 1,236.67 on 20 September, 2022 and 16 December, 2021, respectively.
Currently, it is trading 1.63 percent below its 52-week high and 65.85 percent above its 52-week low.
Market capitalisation stands at Rs 14,376.22 crore.
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