Equity Analysis

RMTL is in business of steel pipes & tubes, which is prone to cyclicality. Valuations for these kinds of business are slightly different than usual. For cyclical businesses, the revenue and profit projection can only be done for a mid-term future. We cannot predict, how the cycles will play and hence not be able to

Management are the only ones who officially runs the company, responsible for Revenues, Profits and many other critical decisions. “Much of the operations of any company depends on how the management is running the business and its efficiency in doing so.” Therefore, before we get into investing in RMTL, we need to understand management’s integrity,

We understood whole business of Ratnamani Metals, right from Product Mix, Revenue to Costing. However, Risk is one major consideration into any business and our area of focus through this blog. Especially businesses of such commodity and cyclicality, where risk of Operating Leverage, Capacity Utilization, High Debt Levels etc. are usually higher that it seriously

Fund Flow analysis will help us to judge how the funds have been utilized by RMTL over the years. The funds should have been used for core operations of the business or for the benefit of shareholders of the company. Any miss-management or inefficient utilizations of the funds will be recognised using this simple fund

Value Added Product (VAP) is an important source of higher profitability for any company. But, few companies have only promised VAP and profits are not really coming. Hence, to understand the VAP category, an analysis of ROIIC will be useful as shown in the table below: This table presented, contains all the factual explanation which

“Earnings per Share (E.P.S)” is very important item through which the performance of companies Y-o-Y is analysed. We often talk about good E.P. coupled with higher growth as a comfortable investing philosophy. Here, when we talk about growth, we mean growth in Revenues and Profitability. The way to measure profitability is actually, Not the PAT

The way we estimated Revenue of the company, similarly we need to do it for costs. We have performed overall costing analysis of Industry before, here we will do it more precisely for RMTL. Let us focus on major costs of RMTL which forms >1% of the revenue. These costs totals to roughly 84% of

We performed Industry Analysis of our segment i.e. Steel Pipes & Tubes, wherein Opportunity Size was the most important aspect. In a similar way Revenue Driver is most important aspect of any company analysis. To start with RMTL’s projection of revenue, have a look at the historical data points first: Capacity standing as of year

Ratnamani Metals & Tubes Limited have consistently earned Economic Profit over the years. It is not easy to do so because when companies earn such higher profits, competitors dive in fast to enjoy similar profitability. With likes of huge companies like Tata Steel, SAIL, JSW Steel, Jindal Steel, etc. it is easy for them to