Ratnamani Metals & Tubes Limited — Q4 FY25 earnings call

Call held 19 May 2025

Management summary

Ratnamani delivered a record-breaking performance in FY25, overcoming a muted first nine months with a strong Q4 surge driven by high value-added products. The company has transitioned to a zero-debt standalone entity while aggressively pursuing domestic and international expansions, including a strategic JV in Saudi Arabia. Despite margin pressure from a shift toward water application projects in the carbon steel segment, management remains confident in maintaining healthy profitability through product mix optimization.

Highlights

  • Achieved highest ever sales on a consolidated basis at ₹5,186 crores for the full year FY25.

  • Standalone Q4 revenue reached ₹1,575 crores, representing an 11% YoY growth.

  • Order book as of March 31, 2025, stands at ₹2,100 crores, with 55% from exports.

  • Company achieved zero debt status on a standalone basis and generated ₹521 crores from operations.

  • Board approved a dividend of ₹14 per share (700% of face value).

  • Ratnamani Finow Spooling Solutions reported a turnover of ₹56 crores with a robust order book exceeding ₹600 crores.

  • Announced a 75-25 Joint Venture in Saudi Arabia to establish a stainless-steel manufacturing facility by December 2026.

  • Management guided for 5% to 10% volume growth and standalone EBITDA margins of 16-18% for FY26.

Concerns

  • Competitive intensity in Stainless Steel Seamless pipes

Key financials

2 periods

Headline

  • Revenue (Consolidated FY)
    ₹5,186 Cr
    YoY +1%
  • Gross Profit Margin (FY)
    34%
  • Cash from Operations
    ₹521 Cr
  • Dividend per Share
    ₹14
  • Order Book
    ₹2,100 Cr

Standalone Q4

  • Revenue
    ₹1,575 Cr
    YoY +11%

What they filed

Q1 FY27: revenue down 30.2%, net profit down 62.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue898 1,294 1,575 1,062 940 +5%794 −39%893 −43%741 −30%
EBITDA149 214 292 192 140 −6%136 −36%122 −58%80 −58%
Net profit102 146 225 145 108 +6%88 −40%93 −59%54 −63%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Stainless Steel Pipes & Tubes
    60% Capacity Utilization₹790 Cr Order Book Contribution
  • Carbon Steel Pipes (Spiral & ERW)
    55% Capacity Utilization
  • Carbon Steel Pipes (LSAW)
    50% Capacity Utilization
  • Ravi Technoforge (Subsidiary)
    12% Q4 Sales Growth11% Full Year Sales Growth

Guidance & targets

Volume

  • Volume Growth Volume · FY26 · Medium confidence 5% to 10%
    And for the current year we can say that roughly 5% to 10% growth on volumes is what we can consider.

    — Manoj Sanghvi, CEO

Margin

  • Standalone EBITDA Margin Margin · FY26 · Medium confidence 16% to 18%
    And on your second question, which was EBITDA margins; EBITDA margins, again depending on the product mix, anywhere between 16% to 18%.

    — Manoj Sanghvi, CEO

  • Ratnamani Finow EBITDA Margin Margin · FY26 · Medium confidence 20%
    So, what we have targeted this year is revenue of Rs. (+350) crores with an EBITDA margin of roughly 20%.

    — Manoj Sanghvi, CEO

Revenue

  • Ravi Technoforge Sales Revenue · FY26 · High confidence ₹350+ crores
    We have a sales plan of almost Rs. (+350) crores for this year.

    — Manoj Sanghvi, CEO

  • Ratnamani Finow Sales Revenue · FY26 · High confidence ₹350+ crores
    For Ratnamani Finow, yes, we have plans that too Rs. 350 plus crores.

    — Manoj Sanghvi, CEO

Profitability

  • Ravi Technoforge EBITDA Margin Profitability · FY26 · Medium confidence 14%
    we feel that the margins should be closer to 14% at EBITDA levels.

    — Manoj Sanghvi, CEO

Capacity

  • Saudi JV Operational Timeline Capacity · by 2026 · High confidence December 2026
    Say for Saudi about, the total roadmap is that we will be operational by December 2026.

    — Manoj Sanghvi, CEO

Risks & concerns

  • Competitive intensity in Stainless Steel Seamless pipes

    high

    New players entering with 'pierced' products are putting pressure on margins in traditional segments like boiler tubes.

    Both acknowledged

  • Muted domestic Oil & Gas demand

    medium

    Domestic line pipe demand for oil and gas is currently muted, forcing a reliance on lower-margin water segment orders.

    Management acknowledged

  • Working Capital Cycle expansion

    medium

    Cash conversion cycle reached 163 days in FY25, partly due to the product mix (water sector) and inventory build-up in subsidiaries.

    Analyst acknowledged

Areas of evasion (2)

  • Specific grades for future SS pipes ('Those kind of information we would not like to divulge')
  • Exact quantum of boiler tube orders

Q&A highlights

2 direct
Margin pressure in SS Boiler Tubes Direct
Currently NTPC as well as the power ministry has allowed the pierced product as acceptable for boiler tubes... we feel that the margins for the boiler products will not remain as it was in the past.

Reveals a competitive threat in a high-margin segment due to regulatory changes allowing lower-cost manufacturing processes.

Asked by Radha, B&K Securities

Profit decline despite revenue growth Direct
One major shift between ‘24 and ‘25 is majority of the orders in ‘24 were for the oil and gas segment in line pipes and in ‘25, it was say 50% of line by business was from water.

Explains the negative operating leverage and margin compression as a result of a product mix shift toward lower-margin water infrastructure projects.

Asked by Dhiraj Dave, Samvad Finance

Backward integration into steel bars Partial
Okay, we are also thinking of maybe going backward, whether it is viable or not, that study is going on... standalone, just to support your pipeline may be not viable, it has to be supported by sales to the other industry.

Indicates management is considering a major strategic shift to secure raw materials and develop new grades, though viability remains under study.

Asked by Radha, B&K Securities

2 min read 5 chapters

Detailed narrative

Record Revenue Amidst Segment Mix Shift

Ratnamani achieved record consolidated sales of ₹5,186 crores in FY25, despite a challenging environment where metal prices were soft and project offtakes were delayed in the first nine months. A strong Q4, with standalone sales of ₹1,575 crores (up 11% YoY), was the primary driver of this performance. However, the company saw a significant shift in its line pipe business, where water application orders—which carry lower realizations than oil and gas—accounted for 50% of the business compared to a much smaller fraction in FY24.

Strategic International Expansion via Saudi JV

The company is aggressively expanding its global footprint through a 75-25 Joint Venture with SESCO in Saudi Arabia. This facility, focused on stainless-steel cold finishing, is expected to be operational by December 2026. Management plans to spend 60% of the allocated capex in the current year, aiming to capture the growing demand in the MENA region, which currently accounts for 25-30% of their total exports.

Subsidiary Performance and Growth Targets

Subsidiaries Ravi Technoforge and Ratnamani Finow are becoming significant growth engines. Ravi Technoforge achieved 11% full-year growth and is targeted to reach ₹350+ crores in sales with 14% EBITDA margins in FY26. Ratnamani Finow, which manufactures spools for the nuclear sector, holds an order book of over ₹600 crores and is also targeted for ₹350+ crores in revenue with a higher EBITDA margin of 20%.

Capacity Utilization and Capex Roadmap

Current capacity utilization stands at 60% for stainless steel and 50-55% for carbon steel segments. To support future growth, the company is investing ₹200-250 crores each in RTL and Ratnamani Finow expansions. Additionally, Phase-II of the Odisha spiral welded plant is expected to commence commercial production by the end of the current calendar year with an incremental investment of ₹40-50 crores.

Navigating Competitive Pressures in Specialty Tubes

Management highlighted a shift in the competitive landscape for boiler tubes, as the Indian government now accepts 'pierced' products alongside extruded ones. This change has intensified competition and is expected to compress margins in a segment where Ratnamani previously enjoyed a stronger position. To mitigate this, the company is focusing on developing higher-grade products that cannot be manufactured via the pierced route.

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