Any current/future new fundraising through debt or equity?

The company plans a capex of Rs350 to 400 Crores over the next 18 to 24 months for capacity expansions in stainless steel tubes and pipes, and carbon steel submerged arc welded pipes and coating. The capex will be funded mainly through internal sources. However, there may be a component of debt for better capital mix if needed. No specific mention of any new equity fundraising. Net cash position as of the latest date is over Rs100 Crores. The company is currently debt-free and is not leveraging LC bill discounting due to negative value impact.

Any current/future capex/capital investment/strategic investment?

Planned capex for FY2023 is Rs100 to 150 Crores (Page 22). Capacity expansion for stainless steel tubes and pipes of approximately Rs180 Crores, to be operational in 18-24 months (Page 4). Capacity increase for carbon steel submerged arc welded pipe and coating at a new location, with Rs170 Crores capex over 18-24 months, outside Gujarat (Page 4 and Page 5). Total announced capex for stainless steel and carbon steel expansions is Rs350-400 Crores over next few years funded mainly through internal accruals, possibly some debt (Page 4). A 15 MW solar power plant in North Gujarat for captive cons

Future growth expectations in sales/revenue/volumes?

Ratnamani Metals targets 15% to 20% revenue growth at constant prices for FY2023, with potential for 20% to 25% growth depending on metal prices. Volume growth is expected around 20% in metric tons, supported by strong order bookings and utilization of new capacities. Stainless steel seamless pipes offer significant growth opportunities, especially in exports, encouraging market share gain. Capacity expansions underway include Rs180 Crore for stainless steel tubes and pipes and Rs170 Crore for carbon steel SAW pipes/coating, totaling Rs350-400 Crores over 18-24 months. The new stainles

Future growth expectations in earnings/operating earnings/profits/EPS?

Ratnamani Metals targets revenue growth of 20% to 25% for FY2023, driven primarily by volume growth in metric tons despite volatility in steel prices. EBITDA margin is expected to remain stable in the 15%-18% range, influenced mainly by product mix rather than raw material price fluctuations. With increased capacity utilization and expansion in value-added stainless steel products, EBITDA margins could trend towards the higher end (~18%) over the next 1-2 years. New capacity additions, including a 20,000-ton extrusion (hot finish) and cold finishing line, will contribute to gradual volum

Current/ Expected Orderbook/ Pending Orders?

As of May 1, 2022, the total order book stands at Rs2223 Crores since the financial year beginning. The carbon steel segment has about 10 lakh tons under bidding, split approximately 60% water projects and 40% oil & gas. The current order book for stainless steel seamless pipes is robust, supported by strong demand domestically and in export markets. The order book is at the highest level, around Rs2300 Crores, with no difficulty in booking orders anticipated for the next two years. Demand for carbon steel line pipes, especially for oil & gas and water projects, is strong with multiple state-w

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Ratnamani Metals & Tubes LtdQ1 FY22Industrial Products

Ratnamani Metals & Tubes Ltd Q1 FY22 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹2,647P/E: 38.5Market Cap: ₹18.9K CrSector: Industrial Products

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Order

Yes

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Ratnamani Metals targets 15% to 20% revenue growth at constant prices for FY2023, with potential for 20% to 25% growth depending on metal prices.
→Volume growth is expected around 20% in metric tons, supported by strong order bookings and utilization of new capacities.
→Stainless steel seamless pipes offer significant growth opportunities, especially in exports, encouraging market share gain.
→Capacity expansions underway include Rs180 Crore for stainless steel tubes and pipes and Rs170 Crore for carbon steel SAW pipes/coating, totaling Rs350-400 Crores over 18-24 months.
→The new stainless steel capacity (20,000 tons extrusion) is targeted for gradual utilization growth over 2-3 years.
→Growth levers include increased contribution of high value-added stainless steel products and expansion into niche applications in domestic and export markets.
→Long-term, the company aims to grow EBITDA margins by moving towards higher value-added product mix, targeting the highest end of the 15%-18% EBITDA margin range.

Margin guidance

Category 3

→Ratnamani Metals targets revenue growth of 20% to 25% for FY2023, driven primarily by volume growth in metric tons despite volatility in steel prices.
→EBITDA margin is expected to remain stable in the 15%-18% range, influenced mainly by product mix rather than raw material price fluctuations.
→With increased capacity utilization and expansion in value-added stainless steel products, EBITDA margins could trend towards the higher end (~18%) over the next 1-2 years.
→New capacity additions, including a 20,000-ton extrusion (hot finish) and cold finishing line, will contribute to gradual volume and profit growth over 2-3 years.
→Capex of Rs100–150 Crores planned for FY2023 aimed at stainless steel and carbon steel pipe expansions, expected to support higher value-added product segments and improved margins.
→Long-term focus on gaining market share in value-added segments domestically and exports, which is expected to structurally improve profitability.
→Earnings growth should mirror volume increases and improved product mix, with an anticipated gradual improvement in operating profits and EPS.

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Fundraise plans

→The company plans a capex of Rs350 to 400 Crores over the next 18 to 24 months for capacity expansions in stainless steel tubes and pipes, and carbon steel submerged arc welded pipes and coating.
→The capex will be funded mainly through internal sources.
→However, there may be a component of debt for better capital mix if needed.
→No specific mention of any new equity fundraising.
→Net cash position as of the latest date is over Rs100 Crores.
→The company is currently debt-free and is not leveraging LC bill discounting due to negative value impact.

Order book

Yes

→As of May 1, 2022, the total order book stands at Rs2223 Crores since the financial year beginning.
→The carbon steel segment has about 10 lakh tons under bidding, split approximately 60% water projects and 40% oil & gas.
→The current order book for stainless steel seamless pipes is robust, supported by strong demand domestically and in export markets.
→The order book is at the highest level, around Rs2300 Crores, with no difficulty in booking orders anticipated for the next two years.
→Demand for carbon steel line pipes, especially for oil & gas and water projects, is strong with multiple state-wise and sectoral projects.
→Stainless steel orders are growing, with export momentum picking up.
→Some logistic challenges due to global supply chain disruptions exist but are being managed.

Capex plans

Yes

→Planned capex for FY2023 is Rs100 to 150 Crores (Page 22).
→Capacity expansion for stainless steel tubes and pipes of approximately Rs180 Crores, to be operational in 18-24 months (Page 4).
→Capacity increase for carbon steel submerged arc welded pipe and coating at a new location, with Rs170 Crores capex over 18-24 months, outside Gujarat (Page 4 and Page 5).
→Total announced capex for stainless steel and carbon steel expansions is Rs350-400 Crores over next few years funded mainly through internal accruals, possibly some debt (Page 4).
→A 15 MW solar power plant in North Gujarat for captive consumption expected to be commissioned by June 2022, providing power cost savings (Page 21).
→Focus on new product facilities and higher value-added product segments for structural margin improvements (Pages 13, 15).

How does Ratnamani Metals & Tubes Ltd rank vs peers in Industrial Products?

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