ICICI Direct has given Buy recommendation for Ratnamani Metals and Tubes recommended buy rating on the stock with a target price of Rs 2400 in its research with a target price of Rs. 2400 in its research report issued on Jun 04, 2021
ICICI Direct’s research report on Ratnamani Metals and Tubes
Ratnamani Metal and Tubes (RMTL) reported an operationally healthy performance for Q4FY21 wherein robust EBITDA margins were the key highlight of the quarter. EBITDA margin for Q4FY21 was at 22.8% compared to 18.3% in Q3FY21 and 15.4%in Q4FY20, notably higher than our estimate of 15.7%. Overall, RMTL’s performance was higher than our estimate on all fronts. For Q4FY21, RMTL reported a net income from operations of Rs 696.1 crore (up 57% QoQ), higher than our estimate of Rs 664 crore. Stainless sales volume was at 5792 tonnes (up 16% QoQ), higher than our estimate 5750 tonnes while carbon steel sales volume was at 63511 tonnes (up 93% QoQ), higher than our estimate of 47500 tonnes. EBITDA came in at Rs 158.8 crore (up 96% QoQ, 64% YoY), higher than our estimate of Rs 104 crore. Ensuing PAT for Q4FY21 was at Rs 109.4 crore (up 82% QoQ, 62% YoY), higher than our estimate of Rs 75 crore.
We value the stock at 25x FY23E EPS of Rs 96 and arrive at a target price of Rs 2400 (earlier Rs 1900). We maintain our BUY recommendation on the stock.