Ratnamani Metals & Tubes Ltd Q4 FY23 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
Yes
Order
Yes
Capex
Yes
3 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 3- FY’24 revenue target: INR 5,000 crores ±5%, up from ~INR 4,500 crores in FY’23.
- Volume for FY’23: ~304,000 tons; capacity utilization between 60%-80% for most products except newly expanded units (~30%).
- Volume growth: ~10% expected for FY’24, despite some softness in carbon steel line pipe demand.
- Utilization for new extrusion capacity expected to improve from 30% in FY’23 to 50-60% going forward.
- Cold finishing capacity expansion adding 1,200-1,500 tons, focusing on high-value stainless steel small-diameter tubes.
- Export growth targets positive, with stainless steel exports forming a strong base (~50% direct, 20% indirect turnover).
- Substantial focus on high-margin products (blended EBITDA margins projected around 15%-18%).
- Capacity can support up to INR 6,000 crores top-line with current infrastructure, subject to demand.
See what Ratnamani Metals & Tubes Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
Yes- The company has taken an enabling resolution to raise approximately INR 500 crores, primarily to support its next growth plan.
- Currently, there is no concrete plan for immediate capex-related fundraising, but the team is actively working on future projects, indicating potential capital requirements.
- The enabling resolution allows for tie-ups with debt, including bonds and other instruments, complying with regulatory requirements.
- As of the latest update, the net debt level stands around INR 140 crores, consisting entirely of long-term borrowings.
- No short-term borrowing is currently reported.
- Major outgoing capex for new projects like the Odisha project and stainless steel cold drawing facility will commence later, suggesting potential future fundraising needs.
See what Ratnamani Metals & Tubes Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- Stainless steel cold finishing capacity expansion of 1,200 metric tons initially, scaling up to 1,500 metric tons, expected completion by December this calendar year or January next year, with a capex of around INR170-180 crores.
- Carbon steel expansion involving land acquisition underway; major capex will start in the first quarter of next financial year.
- Capex guidance for FY '24 around INR150-200 crores, with plans for further growth beyond FY '25.
- Odisha project capex is minimal at present; major spending will be on land and lease rent, with plant capex to follow later.
- Ravi Technoforge, subsidiary, ongoing capex for capacity/process expansion and automation, expected completion by September/October 2023.
- Enabling resolution for an additional INR500 crores capex being considered for future growth plans; no immediate plans but under preparation.
- Solar power project of 15 megawatts commissioned to reduce power costs and support sustainability.
Track Ratnamani Metals & Tubes Ltd — get its next earnings analysis in your feed
Margin guidance
Category 3- Revenue is projected to grow from approx. INR4,450 crores in FY23 to around INR5,000 crores in FY24, with a ±5% variance.
- The company expects volume growth driven by better utilization and development of new specialized product grades.
- EBITDA margins are forecasted to remain stable in the range of 15%-18%, with some quarters seeing 16%-18% due to a favorable product mix.
- Operating profits showed strong growth in recent quarters, with INR300 crores in Q4 FY23 versus INR200 crores in Q3 FY23, underpinned by better product mix and utilization.
- Subsidiary (Ravi Technoforge) is expected to grow revenues by 15%-20% with a margin expansion of 200 basis points in FY24.
- Overall, the company targets sustainable growth in earnings with optimized utilization, product mix, and new capacity expansions.
Order book
Yes- As of April 1st, the order book was approximately INR 2,600 crores.
- Export orders accounted for around INR 557 crores out of the total INR 2,440 crores order book reported as of May 1st.
- Orders mainly come from the oil and gas sector, process industry, power sector, and water segment.
- There is a six-month backlog based on an expected revenue of INR 5,000 crores.
- The company sees good demand in domestic and international water segments.
- While the order visibility in oil and gas transmission lines in India looks muted, business traction in stainless steel pipes and tubes remains encouraging.
- The management expects continued order intake with a potential to reach around INR 5,000 crores revenue next year, supported by a mix of domestic and export orders.
How does Ratnamani Metals & Tubes Ltd rank vs peers in Industrial Products?
Pro featureHow does Ratnamani Metals & Tubes Ltd rank in Industrial Products?
Compare Ratnamani Metals & Tubes Ltd against every Industrial Products company (Q4 FY23) on revenue, margins and earnings-call signals.
Continue your research
What Ratnamani Metals & Tubes Ltd's management said in earlier quarters
Others in Industrial Products this season
- Mitsu Chem Plast (Q1 FY27)
Q1 FY27 showed strong profitability with EBITDA margin improving to 16.29% and net profit margin to 9.18%. Key concall takeaways from Mitsu Chem Plast Ltd's Q1…
- Simplex Castings Ltd (Q1 FY27)
Current capacity expansion planned for 300-350 crores revenue, further growth through organic or inorganic expansion. Key concall takeaways from Simplex…
- Astral (Q1 FY27)
Q1 FY27 plumbing value growth: 10.1%; volume flat for the quarter but strong growth post-April (Page 6, 26) . Key concall takeaways from Astral Ltd's Q1 FY27…
- CPL (Q1 FY27)
Ramp-up of Ahmedabad manufacturing facility over next 2-3 years to support volume growth and improve margins by 1%-1.5%. Key concall takeaways from Captain…