Detailed Narrative
Consistent Growth in Existing Stainless Steel Business
Ratnaveer Precision Engineering has consistently demonstrated robust growth in its core stainless steel business, achieving a CAGR of over 25% in top line, EBITDA, and PAT for the last three years. The company projects this consistent performance to continue, targeting 1,800 crores in revenue from existing operations within the next three years, up from 1,078 crores last year and a target of 1,350 crores for FY26. This business serves a diverse range of industries including automotive, defense, aerospace, and FMCG, ensuring a broad customer base.
Strategic Entry into Copper-Clad Laminate (CCL) Market
The company is making a strategic entry into the CCL market, a critical raw material for PCB and chip manufacturing, currently 100% imported into India. Ratnaveer plans to establish 5 production lines, with the first line expected to commence production by November 2026. This project is projected to contribute 750 crores to the top line within two years at 69% utilization, aiming for 20% EBITDA and 13% PAT individually. The venture is significantly supported by government incentives, including 338 crores from the ECMS scheme and benefits from Gujarat's GEP policy.
Comprehensive Funding and Capital Expenditure Plans
The total capital requirement for the CCL project, including 351 crores for project cost, 46 crores for solar, and 250 crores for working capital, amounts to approximately 650 crores. The company is actively planning to raise 330 crores through a QIP or equivalent by September 2026 to meet these capital expenditures and working capital needs. This is in addition to the 185 crores QIP raised in December 2025, which was allocated for existing business working capital and capex. The capex for the existing business in FY26 was 115 crores.
Strategic European Acquisition Underway
Ratnaveer is in ongoing discussions for the acquisition of a European company specializing in precision components, similar to its own product lines. The primary rationale for this acquisition is customer acquisition, particularly targeting the automobile sector and Fortune 500 clients. While commercial understanding is in place, the due diligence and regulatory processes are expected to take another 10-12 months to complete, due to complexities involving European and Indian laws. The target company has a gross margin of 66% and a net margin of 3%.
Operational Efficiency and Working Capital Management
Despite a negative operating cash flow of 48 crores (484 million) for FY26, management clarified that the net cash flow was positive at 203 crores, including QIP funds. The negative OCF was attributed to ongoing capex and advances, with expectations for stabilization once these projects are fully deployed. The company also noted an increase in trade receivables from 65 crores to 175 crores in FY26, which is linked to new product launches and extended credit periods for new customers, with an expectation of normalization in the coming year.
Long-Term Consolidated Growth and Profitability Targets
Combining its existing stainless steel business and the new CCL venture, Ratnaveer aims for a consolidated top line of 2,500 crores within the next three years. This ambitious target is supported by projected consolidated EBITDA margins of 13.5% and PAT margins of 9.7% to 10.5%. The company emphasizes its commitment to 'volume to value growth' and 'value engineering' as core principles to achieve these targets, ensuring smooth execution with the support of investors and stakeholders.