Multibagger stock Rama Steel Tubes posts 52% PAT growth in Q4, scrip trading 205% above 52-week-low
Established in 1974, Rama Steel Tubes is one of India's top producers of steel pipes, tubes, and G.I. pipes.
PremiumEstablished in 1974, Rama Steel Tubes is one of India's top producers of steel pipes, tubes, and G.I. pipes. In the Indian market for steel tubes and pipes, Rama is one of the most reputable and well-known brands.
During Q4FY23, the company recorded revenue from operations of ₹399.23 Cr up by 58.49% YoY from ₹251.89 Cr during Q4FY22. Its net income stood at ₹393.90 Cr during the quarter ended March 2023 as against ₹250.97 Cr during the quarter ended March 2022. Rama Steel Tubes said its net profit of ₹11.27 Cr during Q4FY23 up by 52% YoY from ₹7.40 Cr during the same quarter of FY22.
Mr. Richi Bansal- Executive Director said that RSTL has delivered steady growth in India volumes despite the volatile operating environment. During Q4FY23 has registered healthy set of numbers in terms of sale, revenue and profitability. The Q4FY23 with the growth in Revenue from operations being 56.95% and growth in sales volume of 86.99 % on Y-0-Y basis. There is growth in demand of our products having the highest level of quality and our ability to cater the needs of all our customers on timely basis.
Richi Bansal said “We are also in process of entering into certain niche segments like supply of steel pipes and tubes to City Gas Distribution and Solar Energy power generation units. We plan to dedicate at-least 25% of our installed production capacity which is 344000 MT to cater to the demand of the Government sector in the coming years, which is having an EBITA margin of 9%-10%, thereby significantly improving our overall margins."
“New plant, in the process of being set up, in Raipur, Chhattisgarh, we have already acquired the required land and started work to set up the plant. The potential market size from this plant is 50,000 MTPA and we are happy to cater the eastern part of country. On the expansion front, we are in process of modernization of our plant located at Sahibabad, Uttar Pradesh with a major goal of de-bottlenecking operations; which will result in increasing our yield per tonne of finished products. The 1st phase of this modernization is slightly delayed and expected to be completed by Q1 of the Fiscal Year 2023-24," said Richi Bansal.
“Our efforts of backward integration at our plant in Anantpur District, Andhra Pradesh wherein we are in process of Cold rolling and Galvanizing Steel Sheets will lead to an inhouse raw material support of 50,000 MT in the upcoming years. With the expansion of Khopoli plant by ~30,000 MT and the setting up of new facility in Raipur, Chhattisgarh, we expect our total capacity to increase to 344000 MT by end of FY25. Further to this, we are in process of adding 10 SKUs to our repertoire on a monthly basis, projecting a total of 1250 SKUs being produced in period of 2 years. This will strengthen our relationships with distributors by offering a complete range of products and make RSTL one of the leading suppliers of Steel Pipes and Tubes in the forthcoming years," Richi Bansal further stated.
While writing this copy, the shares of Rama Steel Tubes were seen trading at ₹40.61 apiece up by 1.40% from the previous close of ₹40.05. The stock touched a 52-week-high of ₹46.10 on (10/01/2023) and a 52-week-low of ₹13.32 on (10/06/2022), indicating that at the current market price, the stock is trading 205% above 52-week-low and 11.88% below the 1 year high.
“Rama Steel Tubes is overbought on the Daily charts with next resistance at 41.7. Investors should book profits at current levels and a daily close below support of 38.45 could lead to target of 30.5 in the near term," said A R Ramachandran, Co-founder & Trainer-Tips2trades.
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