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    Ratnamani Metals

    RATNAMANIGood
    Capital Goods·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

    8

    • 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

    1

    • Competitive intensity in Stainless Steel Seamless pipes

    What Changed1

    vs Q2 FY26

    Guidance items5 → 7 (+2)
    Key financials

    Metrics

    6

    Periods

    2

    Headline

    5
    • 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

    1
    • Revenue
      ₹1,575 Cr
      YoY+11%

    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
    List

    Guidance & targets

    7
    CategoryTargetPriority
    Volume
    Volume Growth
    5% to 10%
    		Medium
    Margin
    Standalone EBITDA Margin
    16% to 18%
    		Medium
    Margin
    Ratnamani Finow EBITDA Margin
    20%
    		Medium
    Revenue
    Ravi Technoforge Sales
    ₹350+ crores
    		High
    Revenue
    Ratnamani Finow Sales
    ₹350+ crores
    		High
    Profitability
    Ravi Technoforge EBITDA Margin
    14%
    		Medium
    Capacity
    Saudi JV Operational Timeline
    December 2026
    		High

    Risks & concerns

    5
    RiskSeverity

    Competitive intensity in Stainless Steel Seamless pipes

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

    high

    Muted domestic Oil & Gas demand

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

    medium

    Working Capital Cycle expansion

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

    medium

    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

    3

    “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

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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%.

    04

    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.

    05

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.