Buy Ratnamani Metals and Tube: target of Rs 2500: Sharekhan

Buy Ratnamani Metals and Tube: target of Rs 2500: Sharekhan

Sharekhan is bullish on Ratnamani Metals and Tube has recommended buy rating on the stock with a target price of Rs 2500 in its research report dated December 03, 2021.







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December 06, 2021 / 02:12 PM IST





Sharekhan's research report on Ratnamani Metals and Tube

New order bookings grew by 2.3x y-o-y to Rs. 2,700 crore during April-Nov’21 and management sees monthly order execution of Rs. 250-300 crore. Thus, we believe that management is on track to achieve revenue growth guidance of 31% y-o-y for FY22. Large opportunities from oil & gas, CGD and water transportation sectors would result in annual order inflow of over Rs. 3,000 crore for next couple of years while ramp-up in utilisation of recently-expanded carbon steel/stainless steel capacity would take margin to historical average of 17-18%. Overall, we expect RMTL’s revenue/EBITDA/PAT to clock 24%/23%/21% CAGR over FY21-24E given potential improvement in order execution with likely pick-up in capex plan of domestic clients and higher export order with approval of RMTL’s new plants by international customers.

Outlook

Hence, we maintain a Buy on RMTL with an unchanged PT of Rs. 2,500 as RMTL’s dominant domestic position makes