Ratnamani Metals and Tubes - Q2FY21 Result Update - ICICI Direct

Ratnamani Metals and Tubes' (RMTL) Q2FY21 performance came in marginally below our estimates. The performance was below our estimates primarily on the back of lower than expected sales volumes. Carbon steel (CS) sales volume came in at 55989 tonnes (down 4% QoQ, up 10% YoY), lower than our estimate of 61250 tonnes. Stainless steel (SS) sales volume was at 5256 tonnes (down 10% YoY, up 31% QoQ), lower than our estimate of 5775 tonnes. Subsequently for Q2FY21, net income from operations was at Rs. 577 crore (down 5% YoY, flattish QoQ), lower than our estimate of Rs. 617 crore. EBITDA margin came in at 14.2% (12.7% in Q1FY21 and 19.1% in Q2FY20), lower than our estimate of 14.8%. The subsequent EBITDA came in at Rs. 82 crore (down 30% YoY, up 11% QoQ), lower than our estimate of Rs. 91 crore. Ensuing PAT came in at Rs. 57 crore (down 26% YoY, up by 14% QoQ), lower than our estimate of Rs. 65 crore.

Valuation & Outlook

The new stainless steel capacity, LSAW capacity and expansion of ERW capacity is likely to be commissioned in H2FY21, thereby providing healthy visibility going forward. We value the stock on 20x FY22E EPS and arrive at a target price of Rs. 1475. We maintain our BUY rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Ratnamani_Q2FY21.pdf

Shares of RATNAMANI METALS & TUBES LTD. was last trading in BSE at Rs.1264.2 as compared to the previous close of Rs. 1263.6. The total number of shares traded during the day was 1288 in over 234 trades.

The stock hit an intraday high of Rs. 1280 and intraday low of 1262. The net turnover during the day was Rs. 1633645.

Source : Equity Bulls

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