Centrum Wealth Ratnamani Metals - Initiating Coverage

January 8, 2015
Initiation
Wealth Research
Ratnamani Metals & Tubes Ltd.

Niche pipe player
BUY
Ratnamani Metal and Tubes Ltd (Ratnamani) is the largest manufacturer

and exporter of customized industrial steel pipes, commanding a market
share of ~40% in the domestic stainless steel pipes market. We believe it
is best suited to benefit from the revival in industrial capex cycle.
Ratnamanis structural growth story is expected to continue for the next
two to three years, given an increase in spends in key industries like
irrigation, oil & gas, nuclear and thermal power considering its expertise
in manufacturing customized pipes. We estimate revenue and PAT
CAGR of 24% and 27%, over FY2014-17E. We expect Ratnamani to
maintain high margins on the back of good order-inflows in the stainless
steel segment. At the current price, the stock trades at 10.8x FY2017E
EPS of Rs62.4. We recommend BUY with a target price of Rs874.
Niche pipe player in the stainless steel segment: Ratnamani has expertise
in manufacturing customized stainless steel pipes and commands a share of
~40% in the domestic market. These pipes are very critical as they are mostly
used in highly corrosive environment and carry a very high failure cost.
Ratnamani has been supplying these products since 1985 and has approvals
from all the leading industry majors. It focuses on manufacturing products
which are used for high end applications, while its peers are focused on
products for low end applications. This enables Ratnamani to command best
in industry margins of ~25-30% in this segment.
Revival in capex cycle to drive carbon steel segment: After a challenging
FY2013, Simdex report (industry report) suggests that the global pipe demand
from 2013-17 is expected to reach $357 billion. The global and domestic
carbon pipe demand for Indian manufacturers is expected to reach ~16 million
tonne from oil & gas sector alone. Further, the Governments initiative on
improving the infrastructure could lead to increasing orders from water and
gas sectors. During Q2FY2015, carbon steel order book grew by 2x YoY at
Rs630 crore. Ratnamani has approvals from all the industry majors and is also
participating in government contracts. It won a contract worth Rs431 crore for
Gujarat Governments Saumi Yojna. Following a likely revival in the overall
capex cycle, we expect Ratnamani to be a key beneficiary considering it has
been a preferred supplier for various companies over the years.
Robust financial performance: While the global pipe demand remained
under pressure between FY2010-14, Ratnamanis revenue grew at 11.7%
CAGR. We estimate its revenue to grow at 24% over FY2014-17E on the back
of 16.5% and 34% growth in the stainless steel and carbon steel segments
respectively. We expect RoEs to improve to 23.5% in FY2017E from 20.2% in
FY2014.
Healthy balance sheet position despite planned capex: Unlike its peers,
the company gradually increased its capacity mostly out of internal accruals
between FY2008-14. This helped Ratnamani to reduce its debt to equity ratio
to 0.1x in FY2014 from 0.9x in FY2010. Going ahead, the company plans to
increase its stainless steel capacity by 20,000 tonne to 48,000 tonne p.a. with
a capex of ~Rs225-250 crore over the next two years. We expect Ratnamani
to fund the capex out of internal accruals and estimate its debt to equity to
reduce to further reduce to 0.03x in FY2017E.
Risk factors: 1) Delay in capex revival; 2) volatility in raw material prices;
Valuation: At the current price, the stock trades at 10.8x FY2017E EPS of
Rs62.4. Considering its leadership position in the domestic stainless steel pipe
segment, we believe Ratnamani is best suited to benefit from the impending
revival in the domestic capex cycle in oil refinery, petrochemicals, power and
fertilizer sectors. We initiate coverage on Ratnamani with a BUY rating and a
target price of Rs874, valuing it at 14x FY2017E EPS.
Financial Summary - Standalone
Y/E Mar (Rs Cr.)
Revenue
YoY (%)
EBITDA
FY2013A
1,201
-1.7
238
FY2014A
1,326
10.4
257
FY2015E
1,803
35.9
348
FY2016E
2,094
16.2
408
FY2017E
2,524
20.5
500
Source: Company, Centrum Wealth Research
EBITDA (%)
19.8
19.4
19.3
19.5
19.8
NPAT
136
143
195
233
291
Recommendation
Current Market Price (Rs)
Target Price (Rs)
Potential upside (%)
Sector Relative to Market
Stock Relative to Sector
675
874
29.5
In-Line
Outperform
Stock Information
BSE Code
NSE Code
Face Value (Rs/share)
No. of shares (Cr.)
Market Cap (Rs Cr.)
Free float (Rs Cr.)
52 Week H / L (Rs)
Avg. Daily turnover (12M, Rs Cr.)
520111
RATNAMANI
2.0
4.7
3,168
1,425
717/120
1.4
Shareholding Pattern (%)

Sept-14
59.9
13.1
0.1
26.9
Promoters
FII
DII
Others
Sept-13
60.2
12.0
1.0
26.8
Source: Bloomberg, Centrum Wealth Research
1 year Indexed Performance

560
510
460
410
360
310
260
210
160
110
60
Jan-14
Apr-14
Jul-14
Oct-14
Ratnamani
Jan-15
BSE Small Cap
Price Performance (%)

Ratnamani
BSE Small Cap
1M
14.5
-2.0
3M
60.2
5.5
6M
63.1
10.0
12M
412.3
67.4

Rijul Gandhi, Research Analyst
Siddhartha Khemka, VP Research
YoY (%)
37.0
5.0
36.8
19.2
25.1
EPS (Rs)
29.12
30.59
41.84
49.86
62.40
Please refer to important disclosures/disclaimers inside
P/E (x)
23.2
22.1
16.1
13.5
10.8
EV/EBITDA(x)
13.5
12.4
9.2
7.8
6.2
RoE(%)
23.1
20.2
23.0
22.7
23.5
Centrum Wealth Research
About the Company

Ratnamani Metal & Tubes Ltd. (Ratnamani) is a niche player in the domestic industrial steel pipes business. It has a wide range of
products in stainless steel and carbon steel pipes & tubes mostly used in highly corrosive environment such as oil & gas refineries,
thermal power and chemical & fertilizer plants. The products can be broadly divided into two parts stainless steel pipes and
carbon steel pipes. Ratnamani is the market leader in the high end stainless steel pipes business with ~40% market share.
Stainless steel pipes cater to industrial projects demand while carbon steel pipes mostly cater to water and oil & gas pipeline
projects. Ratnamani has approvals from all leading industry majors in the domestic as well as international markets. It has a
stainless steel pipe capacity of 28,000 tonne p.a and a carbon steel pipe capacity of 3,50,000 tonne p.a. across two plants in
Gujarat.
Exhibit 1: Product profile
Product Lines
Carbon Steel
Stainless Steel
Instrumentation
Seamless Tubes
Power - Nuclear, Thermal

and solar, Oil & Gas,
Chemicals, Defense, Pulp
and Paper industry
High Frequency - Electric

Resistance Welded (HF-ERW)
Stainless Steel pipes
Mostly Oil & Gas
Oil and Gas Pipeline,

Plumbing, Heating, Water
Supply Systems,
Structural Pipe, General
Submerged Arc Welded

(SAW)
1) Oil & Gas - Cross Country Oil

& Gas Pipelines, City gas
distribution
2) Power - Cooling water line,
Ash handling line
3) Water - Distribution and
drainage pipes
4) Other industrial - Mining
pipes, dredging pipes, high mast
pipes for wind mills
Exhibit 2: FY2014 Revenue breakup industry-wise
Others
6%
Infrastructure,
26%
Refinaries,
Petrochem, Oil
& Gas
33%
Power - Nuclear
and Thermal
35%
Centrum Broking Ltd.
Niche pipe player in the stainless steel segment with best in industry margins
Ratnamani has expertise in manufacturing customized stainless steel pipes. It manufactures customized project pipes, which are
mostly used in highly corrosive environment such as oil & gas refineries, nuclear power, thermal power and chemical & fertilizer
plants. These pipes form a critical part of the plant and carry a very high failure cost. Ratnamanis customers include companies
like Reliance Industries, BHEL, L&T Bharat Petroleum Corporation (BPCL), Indian Oil Corporation (IOCL) and Hindustan Petroleum
Corporation (HPCL), BASF, Alstom, Shell etc. It has been supplying these products since 1985 and has approvals from all the
leading industry majors which gives an edge over its competitors. Ratnamani focuses on manufacturing products which are used
for high end applications, while its peers are focused on products for low end applications. This enables it to command the best in
industry margins of ~25-30% in this segment.
The impending revival in the capex cycle in the oil refinery, petrochemicals, power and fertilizer sectors is likely to create robust
demand for pipe companies going ahead. Expected investments in the oil & gas sector for upgrading the current capacities and
green field expansions could accelerate the order flows in the next few years. On the domestic front, two more green-field refineries
in Barmer (Rajasthan) and Konkan (Maharashtra) have been planned which could start procurement in FY2016E. Further, owing to
the increasing urbanization and industrialization, the government is focused on reviving the power sector. Considering the
significance of the pipes which Ratnamani has been supplying since the past two decades, we expect it to benefit from the likely
increase in order flows from oil refinery, petrochemicals, power and fertilizer sectors going ahead.
Revival in capex cycle to drive carbon steel segment

Globally FY2013 was a challenging year for the carbon steel pipe industry owing to the economic crisis and geopolitical tensions
across countries which led to excess capacity and low utilizations. However, according to Simdex (industry report) the global pipe
demand from 2013-17 is expected to reach $357 billion. As per industry reports, Indian carbon pipes players have ~8 million tonne
pipe capacity. Over the next five years, global and domestic carbon pipe demand (excluding replacement demand) for Indian
manufactures is estimated at ~16 million tonne from Oil & Gas sector alone. Besides, demand from replacement market is also
likely to be 10.4 million tonne in the next five years. Moreover with cost of exploration rising and scanty oil reserves in some parts of
the world oil & gas transportation activity should increase going forward.
Exhibit 3: Up-coming Oil & Gas sector projects over 2013-17
Region
Nos of
Projects
Lenghth (Kms '000)
Value ($ billion)
North America
229
64
69
Latin America
48
33
52
Europe
119
36
65
Africa
62
25
31
Middle East
92
25
41
Asia
76
40
73
Australia
Total
47
14
26
673
237
357
Source: Company Annual Report 2014
Further, the Governments initiative on improving the infrastructure could lead to increasing orders from the water and gas sectors.
Ratnamani had secured a contract from the Gujarat Government - Saumi Yojna worth Rs431 crore, which is executable by May
2015. In India water projects of Gujarat Water Infrastructure Ltd. (GWIL) and few projects from Indian Oil Corporation (IOC) such as
Paradeep- Raipur-Ranchi pipeline, Ennore-Trichy-Madurai pipeline are expected to be awarded in FY2015E-16E. Further, few gas
pipeline projects such as Mehsana-Bhatinda pipeline project, Mallavaram-Bhopal-Bhilwara-Vijaipur natural gas pipeline project and
Bhatinda-Jammu pipeline project are expected to come on stream in the coming years.
During Q2FY2015, carbon steel order book grew by 2x YoY at Rs630 crore. Ratnamani has approvals from all the industry majors
and also has a huge product range. Following a likely revival in the overall capex cycle, we expect Ratnamani to be a key
beneficiary considering it has been a preferred supplier for various companies over the years.
Improving demand environment to drive revenue growth

Despite the global pipe demand remaining under pressure between FY2010-14, Ratnamani reported revenue CAGR of 11.7%
during that period. The companys niche product offerings and robust market share enabled it to maintain EBITDA margins in the
range of 17-20% during FY2010-14. In FY2014, Ratnamani had incorporated its 100% subsidiary Ratnamani Inc., USA to focus on
the increasing opportunities arising out of the North American and Latin American markets. We estimate revenue CAGR of 24%
over FY2014-17E on the back of 16.5% growth in the stainless steel pipe segment and 34% growth in carbon steel pipe segment.
We expect Ratnamani to maintain high EBITDA margins in the range of 19.4% -19.8% on the back of good order-inflows in the
stainless steel segment between FY2014-17E. The RoE is expected to improve to 23.5% in FY2017E from 20.2% in FY2014.
Exhibit 5: EBITDA and margins
50.2
20.5
16.2
600
45
500
35
2000
25
10.4
1500
15
-4.5
1222
1201
FY11
FY12
FY13
-1.7
2524
814
500
2094
5
1803
1000
FY14
FY15E
FY16E
FY17E
-5
-15
Revenue (Rs crore)
22.0
19.8
19.4
300
19.0
18.2
16.8
200
18.0
100
17.0
148
205
FY11
FY12
238
257
348
FY13
FY14
EBITDA (Rs Crore)
FY15E FY16E
Margins (%)
Exhibit 6: Net Profit
Exhibit 7: RoE and RoCE

25.1
300
19.2
26.0
35.0
24.0
30.0
22.0
25.0
20.0
150
100
15.0
10.1
23.1
20.6
20.5
16.0
16.0
5.0
82
99
136
143
195
233
291
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
22.7
19.7
19.9
20.2
18.0
14.0
50
23.5
23.0
21.2
10.0
5.0
FY17E
20.0
(%)
20.4
200
40.0
(%)
(Rs Crore)
250
500
16.0
Growth(%)
36.8
408
Source: Company; Centrum Wealth Research
37.0
20.0
19.3
350
21.0
19.5
19.8
400
(Rs Crore)
35.9
1326
(Rs Crore)
2500
55
(%)
3000
(%)
Exhibit 4: Revenue performance
12.0
16.6
14.7
10.8
0.0
Net Profit (Rs crore)
Growth(%)
10.0
FY11
FY12
FY13
RoE (%)
FY14
FY15E
RoCE(%)
FY16E
FY17E
Strong balance sheet position

Unlike many of its peers, Ratnamani refrained from undertaking aggressive capacity expansion, thereby enabling it to maintain a
low debt profile and generate healthy cash-flows. Between FY2008-14, the company gradually increased its stainless steel pipe
capacity from 18,900 tonne p.a to 28,000 tonne p.a. and its carbon pipe capacity from 3,00,000 tonne p.a to 3,50,000 tonne p.a,
mostly out of internal accruals. This helped Ratnamani to reduce its debt to equity ratio to 0.1x in FY2014 from 0.9x in FY2010.
Going ahead, the company plans to increase its stainless steel capacity to 48,000 tonne p.a. with a capex of ~Rs225-250 crore. We
expect Ratnamani to fund the capex out of its internal accruals and estimate its debt to equity to further reduce to 0.03x in
FY2017E.
Exhibit 8: Free Cash Flow trend
Exhibit 9: Debt to equity trend
200
300
0.55
0.60
0.52
160
(Rs Crore)
(Rs Crore)
140
120
100
178
80
0.50
200
0.40
150
0.30
0.18
100
60
0.20
0.10
112
40
20
250
19
37
20
FY12
FY13
FY14
0.05
FY15E
0.10
0.03
240
275
119
73
71
60
35
FY11
FY12
FY13
FY14
FY15E
FY16E
FY17E
0
FY11
0.08
50
80
53
FY16E
FY17E
(x)
180
0.00
Debt (Rs Crore)
Debt to Equity (x)
Quarterly Performance:
Exhibit 10: Standalone Quarterly Performance
Y/E Mar (Rs Cr.)
Revenue
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
287
347
401
349
438
(4.7)
27.5
16.1
20.0
52.4
Raw Material Expenses
173
233
257
227
281
% of sales
64.1
YoY Growth %
60.1
67.1
64.1
64.9
Employee Expenses
19
20
20
21
25
% of Sales
6.5
5.8
5.1
6.1
5.7
Other Expenses
% of Sales
EBIDTA
EBIDTA margin %
Depreciation
46
29
38
33
44
15.9
8.5
9.6
9.3
10.1
50
64
85
69
88
17.4
18.6
21.3
19.7
20.1
11
12
12
13
16
Interest
Other Income
PBT
40
54
73
58
75
Provision for tax
14
18
23
19.9
25.7
35.1
33.0
30.8
34.0
34.3
Effective tax rate %

Net Profit
26
36
51
38
49
YoY Growth %
(41.4)
13.6
28.6
28.1
88.9
PAT margin %
9.1
10.4
12.7
11.0
11.2
For Q2FY2015 on a standalone basis, revenue grew by 52.4% YoY to Rs438 crore on the back of 81.7% YoY growth in carbon
steel segment and 48.2% YoY growth in stainless steel segment. EBITDA grew by 76% YoY to Rs88 crore with the margins
expanding by 270bps YoY to 20.1%. Reported net profit grew by 89% YoY to Rs49 crore. EPS for the quarter stood at Rs10.5 as
against Rs5.6 in Q2FY2014. The order book increased by 32% YoY to Rs1,068 crore.
Risk Factors:
Delay in capex revival: Ratnamanis growth depends upon capex in sectors like Oil Refinery, Power, Chemicals &
Fertilizers, etc. Any delay in revival of planned industrial capex would impact the growth of the company.
Volatility in raw material prices: Ratnamani utilizes raw materials such as stainless steel coil, plates & ignots and carbon
steel coils & plates. Any major volatility in the raw material prices may impact its profitability.
Valuation
At the current price, the stock trades at 10.8x FY2017E EPS of Rs62.4. Considering its leadership position in the domestic stainless
steel pipe segment, we believe Ratnamani is best suited to benefit from the impending revival in the domestic capex cycle in oil
refinery, petrochemicals, power and fertilizer sectors. We initiate coverage on Ratnamani with a BUY rating and a target price of
Rs874, valuing it at 14x FY2017E EPS.
Exhibit 11: Business Comparison
Revenue Growth (%)
FY16E
FY17E
16.2
20.5
23.6
19.7
9.5
5.1
22.2
18.0
-
Mkt Cap
(Rs Cr)
Company
RATNAMANI METALS
JINDAL SAW LTD
WELSPUN CORP LTD
MAHARASHTRA SEAM
APL APOLLO TUBES
3,168
2,449
1,816
1,558
787
OPM (%)
FY16E
FY17E
19.5
19.8
13.9
14.8
9.5
10.3
9.9
6.2
-
PAT Growth (%)

FY16E FY17E
19.2
25.1
120.2
42.0
151.6
80.2
47.0
15.6
-
Exhibit 12: Relative Valuations

M Cap to
Company
Sales FY14
RATNAMANI METALS
2.4
JINDAL SAW LTD
0.4
P/E (x)
EV/EBITDA (x)
RoE (%)
FY16E
13.5
5.5
FY17E
10.8
3.9
FY16E
7.8
6.2
FY17E
6.2
4.9
FY16E
22.7
11.3
FY17E
23.5
13.7
WELSPUN CORP LTD

MAHARASHTRA SEAM
0.2
1.4
7.2
7.4
4.0
-
5.1
6.0
4.4
-
7.9
8.2
12.3
-
APL APOLLO TUBES
0.3
8.9
5.4
15.0
Exhibit 13: One year forward P/E trend

1000
900
800
700
600
500
400
300
200
100
Price (Rs)
3.0 X
7.0 X
11.0 X
15.0 X
Apr-15
Oct-14
Jan-15
Jul-14
Apr-14
Jan-14
Jul-13
Oct-13
Apr-13
Jan-13
Jul-12
Oct-12
Apr-12
Oct-11
Jan-12
Jul-11
Apr-11
Jan-11
Jul-10
Oct-10
Apr-10
Jan-10
Jul-09
Oct-09
Apr-09
19.0 X
Source: Company, Bloomberg, Centrum Wealth Research
Technical View on Ratnamani Metals & Tubes Ltd.
Ratnamani has been on a strong leg up since the past few months and maintains a strong trading as well as positional
trajectory.
While the overall structure of the scrip remains bullish, its oscillators are indicating clear negative divergence and can thus lead
to short term volatility in the scrip.
The scrip though is likely to find strong support in case of a correction towards 600-620 which is good accumulation range for
fresh buys for a target of 850 in the coming 4-6 months. 550 is an ideal risk management level at the current juncture for the
scrip.
Exhibit 14: Technical Chart
Financial Summary - Standalone

Cash Flow
Income statement
Y/E Mar (Rs Cr)
FY2013
FY2014 FY2015E FY2016E FY2017E
Y/E Mar (Rs Cr)
FY2013 FY2014 FY2015E FY2016E FY2017E
Revenue
1,201
1,326
1,803
2,094
2,524
Growth %
(1.7)
10.4
35.9
16.2
20.5
Raw Material Expenses
740
841
1,180
1,372
1,643
% of sales
61.6
63.4
65.4
65.5
65.1
Change in working capital
Employee Expenses
72
79
103
121
149
Tax expenses
% of Sales
6.0
6.0
5.7
5.8
5.9
Cash flow from Ops
Other Expenses
151
150
171
193
232
Capex
% of Sales
12.6
11.3
9.5
9.2
9.2
Other investing activities
EBIDTA
238
257
348
408
500
Cash flow from Invest
EBIDTA margin %
Proceeds from Eq capital
19.8
19.4
19.3
19.5
19.8
Depreciation
42
46
62
69
77
Interest
12
10
Other Income
18
14
14
15
18
202
214
293
349
437
PBT
Provision for tax
66
71
98
116
145
Effective tax rate %
32.5
33.3
33.3
33.3
33.3
Net Profit
136
143
195
233
291
Growth %
37.0
5.0
36.8
19.2
25.1
PAT Margin %
11.3
10.8
10.8
11.1
11.5
FY2013
Share capital
FY2014 FY2015E FY2016E FY2017E
Reserves & surplus
637
757
920
1,112
1,345
Shareholder's fund
647
767
929
1,121
1,355
Total Loan fund

Deferred tax liability
119
40
73
47
202
214
293
349
Depreciation
42
46
62
69
77
Others
(4)
(3)
(7)
(9)
(14)
51
(33)
(194)
(130)
(142)
(55)
(65)
(98)
(116)
(145)
236
160
57
162
212
(58)
(80)
(37)
(125)
(100)
(5)
(29)
14
15
18
(63)
(109)
(23)
(110)
(82)
Borrowings/ (Repayments)
Dividends paid
Interest paid
Cash flow from financing
Net Cash Flow
(59)
(2)
(11)
(25)
(16)
(22)
(33)
(41)
(57)
(8)
(6)
(7)
(6)
(4)
(184)
(85)
(41)
(58)
(86)
(11)
(34)
(8)
(6)
43
Key Ratios
Y/E Mar
FY2013 FY2014 FY2015E FY2016E FY2017E
71
47
60
47
35
47
RoE
23.1
20.2
23.0
22.7
23.5
RoCE
16.0
16.6
19.7
19.9
21.2
RoIC
26.2
25.0
28.3
28.3
31.0
Inventory
70.7
69.3
68.0
70.0
70.0
Debtors
76.3
76.5
75.0
78.0
78.0
Creditors
29.8
34.9
30.5
27.9
27.4
3.1
3.0
4.2
4.5
5.2
Turnover Ratios (days)
Fixed asset (x)

Solvency Ratio (x)
806
886
1,047
1,228
1,437
Net fixed assets
413
455
429
486
509
29
54
54
54
54
Interest coverage
Per share (Rs)
Cash and bank
(159)
Total cap employed

Investments
437
Return ratios (%)
Balance Sheet
Y/E Mar (Rs Cr)
Net Profit Before Tax
Debt-equity
0.2
0.1
0.1
0.1
0.03
16.1
20.4
42.8
60.9
104.7
60
43
35
30
73
Inventories
233
252
336
402
484
EPS
29.1
30.6
41.8
49.9
62.4
Debtors
251
278
370
448
539
BVPS
138.5
164.2
199.0
240.1
290.2
CEPS
38.2
40.4
55.2
64.6
78.9
DPS (Rs)
4.0
4.5
6.0
7.5
10.5
Dividend Yield (%)
0.6
0.7
0.9
1.1
1.6
16.0
17.2
16.8
17.6
19.7
23.2
22.1
16.1
13.5
10.8
Loans and advances
42
65
63
84
101
Total current assets
586
639
805
962
1,197
Current liab and prov
223
261
241
275
323
Net current assets
363
377
563
688
874
Total assets
806
886
1,047
1,228
1,437
Dividend Ratios
Dividend Payout (%)

Valuation (x)
P/E
P/BV
EV/EBIDTA
EV/Sales
4.9
4.1
3.4
2.8
2.3
13.5
12.4
9.2
7.8
6.2
2.7
2.4
1.8
1.5
1.2
Appendix A
Disclaimer
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1
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member of NSE (Cash, F&O and Currency Derivatives Segments), MCX-SX
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Whether Research analysts or relatives have any financial interest in the

subject company and nature of such financial interest
No
Whether CBL and its associates have any financial interest in the subject
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No
Whether Research analyst or relatives have actual / beneficial ownership

of 1% or more in securities of the subject company at the end of the
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or more in securities of the subject company as on the end of the month
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(a) Whether the research analyst or his relatives has any other material
conflict of interest
No
8
(b) Whether CBL or its associates has any other material conflict of
interest
Yes (Ratnamani is part of CBLs PMS portfolio)
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compensation from the subject company in the past 12 months and
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employee of the subject company
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Centrum Wealth Ratnamani Metals - Initiating Coverage

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January 8, 2015

Ratnamani Metals & Tubes Ltd.

Ratnamani Metal and Tubes Ltd (Ratnamani) is the largest manufacturer

Shareholding Pattern (%)

Source: Bloomberg, Centrum Wealth Research

1 year Indexed Performance

BSE Small Cap

Source: Bloomberg, Centrum Wealth Research

Price Performance (%)

Source: Bloomberg, Centrum Wealth Research

Please refer to important disclosures/disclaimers inside

Centrum Wealth Research

Ratnamani Metals & Tubes Ltd.

About the Company

Power - Nuclear, Thermal

High Frequency - Electric

Stainless Steel pipes

Mostly Oil & Gas

Oil and Gas Pipeline,

Submerged Arc Welded

1) Oil & Gas - Cross Country Oil

Source: Company, Centrum Wealth Research

Exhibit 2: FY2014 Revenue breakup industry-wise

Source: Company, Centrum Wealth Research

Centrum Broking Ltd.

Centrum Wealth Research

Ratnamani Metals & Tubes Ltd.

Revival in capex cycle to drive carbon steel segment

Lenghth (Kms '000)

Source: Company Annual Report 2014

Centrum Broking Ltd.

Centrum Wealth Research

Ratnamani Metals & Tubes Ltd.

Improving demand environment to drive revenue growth

Revenue (Rs crore)

Exhibit 6: Net Profit

Exhibit 7: RoE and RoCE

Source: Company; Centrum Wealth Research

Source: Company; Centrum Wealth Research

Exhibit 4: Revenue performance

Source: Company; Centrum Wealth Research

Centrum Broking Ltd.

Source: Company; Centrum Wealth Research

Centrum Wealth Research

Ratnamani Metals & Tubes Ltd.

Strong balance sheet position

Exhibit 9: Debt to equity trend

Source: Company; Centrum Wealth Research

Debt to Equity (x)

Source: Company; Centrum Wealth Research

Raw Material Expenses

Provision for tax

Effective tax rate %

Source: Company, Centrum Wealth Research

Centrum Broking Ltd.

Centrum Wealth Research

Ratnamani Metals & Tubes Ltd.

PAT Growth (%)

Source: Bloomberg, Centrum Wealth Research

Exhibit 12: Relative Valuations

WELSPUN CORP LTD

APL APOLLO TUBES

Source: Bloomberg, Centrum Wealth Research