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Ratnamani Metals & Tubes Limited Q4 FY24 Earnings Conference Call Summary
Financial Performance • Consolidated revenues exceeded Rs. 5,100 crores. • Profits around Rs. 600 crores for FY24. • Target for FY25: Rs. 6,000 crores in revenue with 10-15% volume growth.
Market Outlook • Positive demand in water and industrial supplies. • Muted performance in domestic oil and gas sector. • Strong demand for stainless steel, particularly from the Middle East and Europe.
Capital Expenditure Plans • Average CAPEX of Rs. 200 crores annually over the next two years. • Rs. 170 crores allocated for a new plant in Orissa.
Production and Demand Insights • Current order book: Rs. 2,400 crores (70% carbon steel, 30% stainless steel). • Anticipated robust demand in oil and gas sector until at least 2030. • Ongoing hydrogen pipeline projects with trials in the US and Europe.
Revenue Growth Potential • Seamless stainless steel segment shows a 25% growth opportunity. • Projected sales target for Ravi Technoforge: Rs. 310-330 crores with improved margins (13-14%).
Export and Market Share • Over 50% of stainless steel turnover from exports. • Estimated market share in stainless steel welded pipes: 20% of Indian demand.
Operational Efficiency • Small expansion in cold finishing facility confirmed. • Cold finishing yields better margins (over 5% difference).
Commitment to Sustainability • Emphasis on long-term sustainability and value creation. • Strong growth trajectory over the past seven years.
Ratnamani Metals & Tubes Limited Q2 FY '24 Earnings Conference Call Summary
Financial Performance • Standalone Revenues: INR 1,084 crores (19.9% YoY increase) • EBITDA: INR 252 crores • Net Profit: INR 169 crores • EBITDA Margin: Improved due to favorable product mix despite inflation
Joint Venture and Expansion • New Joint Venture: With Technoenergy, Switzerland for pipe spooling and auxiliary products • Expected Operations Start: Within 3 to 6 months
Current Order Book • Total Order Book: INR 2,979 crores • Water Projects: Approximately 30% of the order book • Monthly Order Booking: INR 100-150 crores for stainless steel
Market Insights • Bidding Pipeline: Strong demand for water projects; fewer tenders for carbon steel in oil and gas • Market Outlook: Strong demand for water pipes, robust order book, especially in the Middle East
Growth Projections • Revenue Projection: INR 4,500 to 5,000 crores with 10-15% growth expectation • Utilization Rate: Average of 60%
Capital Expenditure • Ongoing Investments: INR 40-50 crores for Ravi Technoforge • Group Capex: Projected at INR 250-300 crores for two major projects, completion expected by mid to late 2024
Production Expansion Plans • New Stainless Steel Plant: Expected by June 2024 • New Carbon Steel Plant: Expected by September 2024
Dividend and Growth Strategy • Dividend Payout: Stable at around 20% of profits • Revenue Target: Aiming for closer to INR 6,000 crores
Sector-wise Order Book Distribution • Current Order Book: INR 2,975 crores • Domestic Sources: INR 2,370 crores • Oil and Gas Sector: 70% of the order book • Power and Water Applications: Remaining 30%
Export Sales Mix • Export Sales: 30% in the first half of the year, down from 38-40% the previous year
Closing Remarks • Participants Acknowledged: Thanks and well wishes for the upcoming festival season from management.
Ratnamani Metals & Tubes Limited Q4 FY '23 Earnings Conference Call Summary
Key Financial Performance • Record Revenues: Over INR 4,400 crores for Q4 FY '23. • Profitability: Exceeded INR 500 crores. • Year-on-Year Growth: 47% revenue increase in Q4. • FY '24 Revenue Target: Anticipated around INR 5,000 crores with stable margins.
Project Updates • Successful Completions: Notable projects include a 15 MW solar project. • Ongoing Capital Expenditures: Focus on enhancing efficiency and product specialization.
Capacity Utilization • Production Volume: 304,000 tons in FY '23. • Utilization Rates: • Most segments: 50%-60%. • Stainless Steel Seamless: 80-90%. • Stainless Steel Welded: 50-65%. • Hot Extrusion: 30%.
Future Growth Plans • Expansion: Increasing stainless steel cold finishing capacity; carbon steel expansion ongoing. • Revenue Projections: Anticipated recovery in Ravi Technoforge project with projected revenues of INR 300 crores.
Debt and Financial Management • Total Debt: INR 75 crores with annual repayments of INR 15-20 crores. • Net Cash Balance: Approximately INR 20-30 crores; long-term debt around INR 140 crores.
Market Demand and Margins • Order Book: Strong demand from oil and gas, water segments; some softness in CGD and line pipe segments. • Margin Expectations: 15%-18%, influenced by product mix and demand fluctuations.
Capital Expenditure Plans • Capex for FY '24: Approximately INR 150-200 crores planned. • Current Projects: Ongoing projects in Odisha and other facilities.
Bidding Projects and Export Focus • Key Initiatives: Projects in oil and gas sector with GAIL and IOCL; water projects in Gujarat and Africa. • Export Strategy: Focus on exports with the new LSAW plant; project-based nature complicates export predictions.
Challenges and Market Conditions • CGD Sector Issues: Rising gas prices and policy changes viewed as temporary challenges. • Market Dynamics: Low line prices in oil and gas, but high process prices for stainless and carbon steel.
Conclusion • Management Outlook: Optimistic about sustaining export orders and overall growth despite market challenges.
Ratnamani Metals & Tubes Limited Q4 FY '23 Earnings Conference Call Summary
Key Financial Highlights • Record Revenues: Over INR 4,400 crores for Q4 FY '23. • Profitability: Exceeded INR 500 crores. • Year-on-Year Growth: 47% revenue increase in Q4. • FY '24 Revenue Target: INR 5,000 crores with stable margins.
Operational Insights • Production Capacity: Total of 304,000 tons produced in FY '23. • Utilization Rates: • Most segments: 50%-60%. • SS seamless: 80-90%. • SS welded: 50-65%. • New hot extrusion: 30%. • Expansion Plans: Increasing stainless steel cold finishing capacity and carbon steel expansion.
Market Dynamics • Demand Trends: Increased demand due to antidumping duties on stainless steel pipes. • Ravi Technoforge Performance: Revenue decline due to financial stress; projected recovery to INR 300 crores.
Financial Position • Total Debt: Approximately INR 75 crores with annual repayments of INR 15-20 crores. • Cash Balance: Fluctuates around INR 20-30 crores. • Long-term Debt: Approximately INR 140 crores.
Capital Expenditure (Capex) Plans • FY '24 Capex: Set at INR 350 crores. • Odisha Project: Minimal spending currently; significant capex expected to start later.
Export and Product Strategy • Export Revenue: 20% of total revenues; INR 557 crores in export orders. • Manufacturing Processes: Distinctions between hot extrusion, pilgering, and drawing processes. • Margin Guidance: Long-term margins shifted to 16%-18% due to favorable product mix.
Future Growth and Projects • Bidding Projects: Key initiatives in oil and gas, including projects with GAIL and IOCL. • Sector Pressures: Temporary challenges in CGD sector due to rising gas prices and policy changes.
Conclusion • Management Outlook: Optimistic about sustaining growth and maintaining margins, with a focus on exports and ongoing projects.