East India Securitie's report on Rajratan Global Wire
Rajratan is going through a transformational phase in the industry with aggressive supplies by competitors from China on account of lower demand in China, coupled with the ensuing geopolitical situation in Europe and Middle East. Chennai expansion is on stream and is expected to start commercial operations in Q1 FY25. Focus will be on volume growth with a willingness to sacrifice profitability margins depending on the customer and business conditions.
Outlook
Rajratan is currently trading at P/E of 20.1x on FY26 basis. We have valued the stock based on P/E methodology. Since, the entire Chennai capacity is expected to commence commercial production in Q1FY25, we have assigned multiple of 20x (2year forward) on FY26E PAT of Rs1,598mn to arrive at a target price of Rs630 per share, which is potential upside of ~0.1% from current market price and recommend “HOLD” on the stock.
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