Ratnamani Metals and Tubes - Result Update - ICICI Securities

Ratnamani (RMTL) reported a steady set of Q4FY20 numbers wherein topline, EBITDA came in line with our estimates while PAT came in higher than our estimate. For Q4FY20, net income from operations was at Rs. 629.1 crore (down 8% YoY, 17% QoQ) in line with our estimate of Rs. 637.6 crore. Stainless steel (SS) sales volume was at 6643 tonnes (up 23% YoY), higher than our estimate of 5300 tonnes. Carbon steel (CS) sales volume was at 60663 tonnes (down ~20% YoY), lower than our estimate of 68000 tonnes. EBITDA margin was at 15.3%, higher than our estimate of 14.5% (14.4% in Q4FY19, 14.3% in Q3FY20). Hence, reported EBITDA came in at Rs. 96.0 crore (down 3% YoY, 11% QoQ) in line with our estimate of Rs. 92.3 crore. Ensuing PAT was at Rs. 67.3 crore (up 7% YoY, down 33% QoQ), higher than our estimate of Rs. 60 crore.

Valuation & Outlook

Ratnamani reported a steady Q4FY20 performance. Furthermore, on a sequential basis, the higher margin SS segment order book increased 28% QoQ, auguring well for the company. We value the stock on 12x FY22E EV/EBITDA and arrive at a target price of Rs. 1200. We maintain our BUY rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Ratnamani_Q4FY20.pdf

Shares of RATNAMANI METALS & TUBES LTD. was last trading in BSE at Rs.991.05 as compared to the previous close of Rs. 994.6. The total number of shares traded during the day was 155 in over 102 trades.

The stock hit an intraday high of Rs. 1008.5 and intraday low of 935.9. The net turnover during the day was Rs. 153970.

Source : Equity Bulls

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