RATNAMANI - Ratnamani Metals & Tubes Ltd Share Price

In the earnings conference call for Ratnamani Metals & Tubes Limited on May 18, 2026, management provided a cautious yet optimistic outlook for the company's future. CEO Manoj Sanghvi highlighted that the company faced challenges in Q4 of FY26, with sales for the quarter falling to INR 893 crores, down from INR 1,575 crores in the same quarter last year. For the full fiscal year, standalone sales decreased to INR 4,800 "“ 5,000 crores compared to INR 5,186 crores the previous year. Despite these pressures, the company's EBITDA margins remained stable due to a focus on operational efficiency and a higher mix of value-added products.

The current order book stands at approximately INR 2,160 crores, with exports contributing around INR 700 crores. Management expressed confidence in improved demand visibility, citing an expected recovery in market conditions. The company is also set to capitalise on its strong subsidiary performance in the coming quarters, with projections indicating a growth outlook of about 20% for the spooling business and 10-15% for Ravi Technoforge.

Key points from management include:

• Expectation of improved clarity and demand from the Middle East and domestic markets in the coming months.
• Focus on maintaining profitability margins between 16%-18%, contingent upon a normalisation of the current geopolitical situation.
• Anticipation of higher capacity utilization following the lifting of project delays and the potential contribution from ongoing expansion projects.
• The company remains debt-free on a standalone basis, with INR 800 crores in cash reserves, facilitating the capacity for future investments.

Management's overall sentiment indicates a readiness to navigate upcoming challenges while seizing growth opportunities across both domestic and international markets.

Here are the major questions and their detailed responses from the Q&A section of the Ratnamani Metals & Tubes Limited earnings transcript:

1. Question: "Do you believe that there is a structural change underway in the profitability per metric in stainless steel? If margins decline structurally, where do you see the best deployment opportunities for Ratnamani?"

Answer: "The stainless-steel volume in the last fiscal year actually went up, not down, while prices were decreased. Although competition has intensified, our focus remains on high value-added extruded products, where we face limited new entrants. Debottlenecking capex is ongoing, and we're investing in instrumentation tubes. Our capital is primarily directed towards established and promising segments."

2. Question: "How do you see the business opportunity evolving for stainless-steel and carbon steel divisions over the next one to two years?"

Answer: "We anticipate a rebound in demand for both carbon steel and stainless-steel pipes post global conflicts, given the need for refinery and petrochemical projects. While we cannot predict the exact timeline for this normalization, we expect increased demand as inquiries have begun to rise in key markets."

3. Question: "Is the spool pipe assembly a one-time requirement for nuclear plants, and how confident are you in order book growth?"

Answer: "Spool pipe orders are not one-time; they recur based on ongoing global power demands. With the push for nuclear projects, we believe RFSS has substantial growth potential, especially being the only approved supplier for certain international projects, which sets a promising trajectory for order growth."

4. Question: "What is the percentage of exports for Ravi Technoforge, and how does the U.S. tariff situation affect contracts for your business?"

Answer: "Approximately 35% to 40% of Ravi Technoforge's revenue comes from exports. Though the tariff equalization could provide some opportunities, most of our business is already securing orders through established channels, and we do not expect immediate drastic impacts from tariff adjustments."

5. Question: "What's your outlook on CGD inquiries given current market conditions?"

Answer: "We are observing traction in inquiries from gas transmission companies, especially in renewable energy and thermal power segments. While there have been concerns regarding financial strains, we expect significant demand to emerge once current market issues are resolved."

6. Question: "Can you provide a breakdown of your current order book in carbon steel versus stainless steel?"

Answer: "As of May 1, the order book is around INR2,162 crores, with INR531 crores in stainless steel and INR1,631 crores in carbon steel, indicating a healthy mix, of which INR697 crores constitutes exports."

7. Question: "Do you expect to maintain your margin guidance in FY27 despite current market pressures?"

Answer: "We anticipate maintaining margins close to 16% to 17%, factoring in product mix adjustments. The ongoing demand for carbon steel from the oil and gas sector should help sustain margins as projects begin to materialize."

8. Question: "What is the growth guidance for Ravi Technoforge and what new customer segments are you exploring?"

Answer: "We forecast a growth of 10% to 15% for Ravi Technoforge in FY27, primarily due to the new capacity being added, which will allow us to tap into new automotive segments and expand our customer base significantly."

These answers reflect the management's perspective and strategic outlook, helping stakeholders gauge the company's trajectory in a challenging market landscape.