Gladiator Stocks - Ratnamani Metals and Tubes - ICICI Direct

Strategy

Buy Ratnamani Metals and Tubes in the range of Rs. 1920.00-1980.00 for target price of Rs. 2300.00 with stop loss of Rs. 1755.00. Time Frame: Six months

Technical View

- The stock is in a strong up trend forming higher high-low in all time frame. It is currently seen resuming its primary up trend after a healthy consolidation above the last three month's range breakout area (Rs. 1797-1451), signalling resilience. It offers a fresh entry opportunity

- We expect the stock to continue its uptrend and head towards Rs. 2300 in the coming months as it is the 123.6% extension of the previous up move Rs. 1195 to Rs. 1797 as projected from the recent major trough of Rs. 1451 signalling upside towards Rs. 2300 levels

- The 10 week's EMA has acted as strong support for the stock in the entire up move since June 2020. The stock saw a strong rebound multiple times after testing the 10 weeks EMA. Even in the current scenario, we expect it to maintain the same rhythm and witness a rebound in coming weeks

Fundamental View

- Ratnamani Metals and Tubes (RMTL) is a niche player with superior capabilities in the domestic industrial pipes and tube domain. RMTL manufactures a wide range of stainless steel and carbon steel pipes and tubes, which find application in key end user industries like oil & gas refineries, power, healthcare, etc. RMTL has built its competitive capabilities over three decades. Within the higher margin stainless steel tubes and pipes (SSTP) segment, the company offers a variety of high-end products of various grade and sizes, to cater to diverse requirements of customers

- Ratnamani's aggregate order book witnessed an uptick over the last few months. RMTL's order book as on January 1, 2021 was at Rs. 1359 crore (Rs. 1178 crore as on October 1, 2020). Stainless steel (SS) order book was at Rs. 347 crore (Rs. 439 crore as on October 1, 2020), while carbon steel (CS) orders were at Rs. 1012 crore (Rs. 739 crore as on October 1, 2020)

- Going forward, over the medium term horizon, orders from the healthcare sector (especially API segment), oil & gas sector, etc, are likely to flow-in thereby auguring well for the for the higher margin Stainless steel segment of the company

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GladiatorStocks_Ratnamani_Apr21.pdf

Shares of RATNAMANI METALS & TUBES LTD. was last trading in BSE at Rs.2001 as compared to the previous close of Rs. 1899.9. The total number of shares traded during the day was 5324 in over 1086 trades.

The stock hit an intraday high of Rs. 2069.6 and intraday low of 1905.7. The net turnover during the day was Rs. 10621049.

Source : Equity Bulls

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