Hold Rajratan Global Wire; target of Rs 798: East India Securities

East India Securities recommended hold rating on Rajratan Global Wire with a target price of Rs 798 in its research report dated April 25, 2023.

Broker Research

April 25, 2023 / 14:52 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

East India Securitie's report on Rajratan Global Wire

India volume at 16,715 MT was up 18.8% YoY but down 21.7% QoQ. Realization at ~Rs.96,404/ MT was down 6.0% YoY & 0.6% QoQ. The capacity utilization levels in Q4 stood at 93%. After a slight drop in volume, the Indian market recovered during Q4. Thailand volume at 6,301 MT was down 37.1% YoY/ 11.0% QoQ. Realization at ~Rs.92,509/ MT was down 10.2% YoY/ 1.9% QoQ. The capacity utilization levels in Q4 stood at 67%. The sales volume dropped due to weak demand and inventory correction taken by tyre companies operating in Thailand. Gross margin per MT was lower by 13.7% YoY & 14.0% QoQ at Rs.33,438/ MT. The management had persisted with elevated prices even as volumes dropped. EBITDA margin at 15.4% was lower by 380 bps YoY & 348 bps QoQ primarily on account of lower gross margins.

Outlook

Rajratan is currently trading at P/E of 19.6x on FY25 basis. We have valued the stock based on P/E methodology. Since, the entire Chennai capacity is expected to be completed in H2FY24, we have assigned multiple of 20x (2-year forward) on FY25E PAT of Rs2,027 mn to arrive at a target price of Rs798 per share, which is potential upside of ~1.8% from current market price and recommend “HOLD” on the stock.

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