Buy Ratnaveer Precision Engineering; target of Rs 200: ICICI Direct

ICICI Direct's research report on Ratnaveer Precision Engineering

Ratnaveer Precision Engineering (RPEL), established in 2002, is a Gujarat based stainless steel (SS) product manufacturer focused on producing finished sheets, washers, solar roofing hooks, pipes and tubes • The company operates out of four manufacturing units in Gujarat with total manufacturing capacity stood at 30000 tonnes as of FY24 • SS finishing line sheets contributed ~47% to total revenues in FY24 followed by SS washers (~23%), tubes & pipes (~17%), sheet metal components (~8%) and SS fasteners & components (~5%).

Outlook

We estimate revenue CAGR at ~23% over the period FY24-26E. EBITDA and PAT are expected to increase by ~42% and ~44% CAGR over the same period. Strong earnings growth would also translate into improvement in return ratios for the company during the period. We recommend Buy on RPEL and assign a target price of ₹ 200 (valuing it at 15x FY26 P/E).

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