Q3FY21 Result Update - Ratnamani Metals and Tubes - ICICI Direct

Ratnamani Metals and Tubes (RMTL) reported operationally good set of Q3FY21 numbers. For the quarter, topline came in line with our estimates while EBITDA & PAT came in higher than our estimates. Healthy operational performance was on the back of better-than-expected sales volumes from the stainless steel division (higher margin segment). This aided the company to report healthy EBITDA margins for the quarter. For Q3FY21, Ratnamani reported a net income from operations of Rs. 441 crore, broadly in line with our estimate of Rs. 448 crore. Stainless sales volume was at 5015 tonnes (higher than our estimate of 4550 tonnes) while carbon steel sales volume were at 32968 tonnes (lower than our estimate of 48125 tonnes). EBITDA came in at Rs. 80 crore, higher than our estimate of Rs. 66 crore. EBITDA margin was at 18.1% (highest in the last five quarters) higher than our estimate of 14.8% (14.3% in Q3FY20, 14.2% in Q2FY21). Ensuing PAT for the quarter was at Rs. 60 crore, higher than our estimate of Rs. 41 crore.

Valuation & Outlook

RMTL's Q3FY21 performance was aided by healthy EBITDA margins. Going forward for FY21E, FY22E and FY23E, we model EBITDA margin of 14.8%, 15.8% and 16.0%, respectively. We introduce FY23E estimates and roll over our valuations to FY23E. We value the stock at 24x FY23E EPS and arrive at a target price of Rs. 1900 (earlier target price of Rs. 1475). We maintain our BUY recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Ratnamani_Q3FY21.pdf

Shares of RATNAMANI METALS & TUBES LTD. was last trading in BSE at Rs.1607.65 as compared to the previous close of Rs. 1636. The total number of shares traded during the day was 2284 in over 477 trades.

The stock hit an intraday high of Rs. 1647 and intraday low of 1604.1. The net turnover during the day was Rs. 3703874.

Source : Equity Bulls

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