At a Glance
Ratnamani Metals & Tubes Ltd, the stainless steel and carbon steel pipe maestro, delivered a Q1 FY26 PAT of ₹127 crore, up 21% YoY, on a revenue of ₹1,152 crore (flat YoY, down 3% QoQ). Margins remained steady at 16%. Despite the earnings cheer, the stock took a 2.3% dip, because Mr. Market seems allergic to flat sales growth—even if the pipes are shinier than ever.
Introduction
Imagine a company that’s literally in the business of making things flow—oil, gas, chemicals—yet its revenue pipeline seems clogged. That’s Ratnamani Metals for Q1 FY26. The company serves critical sectors like oil & gas, refineries, nuclear, and petrochemicals, with high-spec stainless and carbon steel pipes.
But investors today are acting like moody plumbers: margins good, profits up, but revenue flat? Cue sell button. With a P/E of 33 and stock price down nearly 30% YoY, Ratnamani needs to unclog its growth pipeline fast.
Business Model (WTF Do They Even Do?)
Ratnamani manufactures seamless & welded stainless steel pipes, carbon steel pipes, and alloys, catering to industries where failure isn’t an option. The business is primarily project-based, with orders tied to capex cycles in oil & gas, petrochem, and power sectors.
Revenue Mix:
- Steel Tubes & Pipes (93%) – the bread, butter, and the whole meal.
- Other Alloys & Services: negligible.
USP? High-quality, specialized pipes with certifications that keep global clients happy. Risk? Order delays, cyclicality, and raw material price swings.
Financials Overview
Q1 FY26 Snapshot:
- Revenue: ₹1,152 Cr (flat YoY, -3% QoQ)
- EBITDA: ₹188 Cr (↑15% YoY), OPM 16%
- PAT: ₹127 Cr (↑21% YoY)
- EPS: ₹18.8
FY25 Summary:
- Revenue: ₹5,154 Cr (flat YoY)
- PAT: ₹563 Cr (↓10% YoY)
- Margins: OPM 16%, PAT margin 10.5%.
Commentary: Profits are marching up thanks to better cost control and product mix, but the topline is as stagnant as a blocked pipeline.
Valuation
Current Price ₹2,590. P/E 33.6. Book Value ₹519 → P/B 5.0. Not cheap, not dirt expensive either.
Fair Value Range
- P/E Method:
Sector P/E ~25. Using 28× FY26E EPS (₹82 annualized):
→ Fair Price ≈ ₹2,296 - EV/EBITDA Method:
FY25 EBITDA ₹848 Cr, assume EV/EBITDA 10× → EV ≈ ₹8,480 Cr → Price ≈ ₹2,100 - DCF (Quick Math):
Assume 10% growth, 11% WACC, 3% terminal → FV ≈ ₹2,350
Fair Value Range: ₹2,100 – ₹2,350
(Current price ₹2,590 is above fair value – market pricing in a turnaround.)
What’s Cooking – News, Triggers, Drama
- New Business Heads: Appointed for stainless and carbon divisions – restructuring to boost efficiency.
- Oil & Gas Demand: Global capex uptick could help order inflows.
- Risk: Flat sales trend, high working capital cycle, and forex fluctuations.
- Stock Sentiment: Down 29% in one year – investor patience running thin.
Balance Sheet
| Particulars (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 3,780 | 4,020 | 4,906 |
| Liabilities | 1,190 | 879 | 1,269 |
| Net Worth | 2,590 | 3,141 | 3,637 |
| Borrowings | 237 | 153 | 157 |
Auditor Remark: Almost debt-free. Balance sheet strong, but liabilities jumped—watch out for project-related risks.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | 310 | 511 | 536 |
| Investing CF | -204 | -146 | -397 |
| Financing CF | -116 | -193 | -130 |
Remark: Operating cash is solid, investing cash negative due to capex—future capacity ramping up.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 19% | 19% | 16% |
| ROCE | 27% | 28% | 22% |
| P/E | 36 | 34 | 33 |
| PAT Margin | 11% | 10% | 10% |
| D/E | 0.09 | 0.05 | 0.04 |
Comment: ROE dipping, margins steady. Valuations still demanding.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 4,474 | 5,059 | 5,154 |
| EBITDA | 776 | 897 | 848 |
| PAT | 512 | 625 | 563 |
Remark: Revenue stagnant in FY25, PAT fell—needs FY26 rebound to justify valuations.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| APL Apollo | 20,885 | 801 | 56 |
| Welspun Corp | 14,392 | 1,622 | 15 |
| Shyam Metalics | 15,945 | 922 | 30 |
| Ratnamani | 5,154 | 563 | 33 |
Remark: Ratnamani is smaller but maintains premium multiples due to niche, high-margin products.
Miscellaneous – Shareholding, Promoters
- Promoters: 59.8% – stable.
- FIIs: 11.3% – slight reduction.
- DIIs: 19.2% – institutions increasing stake.
- Public: 9.7% – retail holding shrinking.
Promoter Bio: Shah family – conservative managers with a focus on quality rather than quantity.
EduInvesting Verdict™
Ratnamani Metals is fundamentally strong: near debt-free, high-quality products, and steady margins. But the lack of topline growth and premium valuations keep it from being a no-brainer.
SWOT
- Strengths: Strong balance sheet, niche products, high ROCE.
- Weaknesses: Flat revenue, high valuation, cyclicality.
- Opportunities: Oil & gas investments, stainless demand growth.
- Threats: Order delays, Chinese competition, forex risks.
Conclusion:
The company is like a premium pipe—durable, shiny, but expensive. If growth returns, the stock can flow smoothly again. Until then, it’s a hold-for-quality play, not a momentum darling.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Ratnamani Metals, Steel Pipes, Q1 FY26 Results, Industrial Stocks Analysis
