Ratnaveer Precision Engineering Limited

Ratnaveer Precision Engineering reported its highest-ever Q2 performance, with revenue reaching ₹287 crores, EBITDA at ₹30.26 crores, and PAT at ₹15.35 crores. This represents a year-on-year revenue growth of over 25%. The EBITDA margin also saw a slight improvement from 10.34% in Q1 to 10.51% in Q2 FY26, reflecting the company's strong operational execution and focus on profitability.

The company has set ambitious revenue targets, aiming for ₹1,500 crores by FY27 and ₹1,800 crores by FY28. This growth will be fueled by ongoing CAPEX initiatives, including the recently completed ₹48 crores CAPEX (now 80-90% utilized) and new planned CAPEX of ₹68 crores for tubes, circlips, fasteners, and solar plants, expected to start by December 2025 and complete by July 2026. Additionally, a copper-cladded laminates project is slated to begin in mid-December 2025, also targeting July 2026 completion, which is expected to contribute significantly to future revenue.

Ratnaveer differentiates itself through a diverse product portfolio, offering three distinct product categories (fasteners, tubes/pipes, sheet metal components) and serving multiple industries (automotive, aviation, marine, solar, defense) under one roof. With over 10,000 SKUs, the company acts as a preferential buyer for customers seeking a wide range of stainless steel products. Management emphasized its backward and forward integrated operations, from scrap to finished product, and its use of 100% green power as key competitive advantages.

To support its aggressive growth and working capital requirements, Ratnaveer plans to raise up to ₹200 crores through a Qualified Institutional Placement (QIP), with ₹150 crores specifically earmarked for working capital. The company also confirmed its commitment to maintaining promoter stake, with warrants already issued and further plans to ensure promoter holding remains at 54-55% even after the QIP. This strategy aims to leverage capital market confidence for long-term growth without the collateral requirements of traditional bank borrowings.

Management is focused on improving EBITDA margins, targeting 13.5% by FY27. Key drivers for this expansion include the installation of four megawatts of solar plants to reduce power costs by 90%, and an increasing contribution from higher-margin value-added products. These value-added products, such as circlips, electropolished tubes, and sheet metal components, are expected to contribute ₹200 crores to the ₹1,500 crore topline with a PAT margin of 15-20%, significantly boosting overall profitability.

Beyond organic expansion, Ratnaveer is actively exploring inorganic growth opportunities through acquisitions. The company is in dialogues to acquire targets with a topline of ₹600-700 crores for an estimated ₹150 crores. This strategy aims to enhance customer acquisition, technology, and talent, with funding structured through an initial 51% stake and the remainder from an earning-out model over five years. Management expects to share more definitive news on this front soon.

While receivables saw a slight increase in H1 due to new product introductions, management expects inventory days to be maintained between 110-120 days in the coming years, down from 114 days last year. The company is focused on improving its working cycle to enhance direct profitability, with QIP funds intended to bridge any working capital gaps arising from rapid growth and expansion into new product lines.