Not Rated Ratnaveer Precision Engineering Ltd for Target Rs Not Rated by Choice Institutional Equities
Ratnaveer Precision Engineering (RATNAVEE) is shifting from a stainless-steel washer and finishing-sheet maker to a broader downstream metals platform, with copper-clad laminate (CCL) as the next growth leg. We visited the company's facilities in Gujarat and met the management team. The set-up is integrated across finishing sheets, washers, fasteners and SS tubes & pipes, with ~90% renewable power. At the CCL site, Line 1 machinery was dispatched from China and commissioning next month is on track
Our View: RATNAVEE is at an inflection point, adding a higher-margin, import-substituting electronics-materials business to a stable stainlesssteel base. As a first mover in domestic CCL, it benefits from a 50% capex subsidy and a 2% cashback for local PCB makers. Realisation of ~INR 5,500 per sheet, against ~INR 1,260 assumed earlier, improve project returns.
Management guides FY27 revenue of INR 13,500–14,000 Mn (+26–31% YoY) and FY29 revenue of INR 25,000 Mn (INR 18,000 Mn stainless steel and INR 7,500 Mn CCL), a ~33% CAGR over FY26–29E. Blended EBITDA margin is targeted at ~14% as compared to 10.5% in FY26. Guidance is conservative until CCL production stabilises, so upside is possible if realisations hold.
We believe RATNAVEE can build a scaled CCL franchise alongside its stainless-steel business. Key monitorables: On-time Line 1 commissioning, PCB customer approvals and working capital during ramp-up
Key Takeaways from the Meeting
Business Overview and Revenue Guidance
1) Stainless Steel Business:
? FY26 Performance: Revenue stood at ~INR 10,687 Mn with an EBITDA of INR 1,122 Mn (~10.4% margin) and PAT of INR 643 Mn (~6% margin)
? FY29 Vision: Guidance to reach INR 18,000 Mn in top-line revenue with ~12% EBITDA margin and ~7% PAT margin
? Mid-term Trajectory: Expected revenue of INR 13,500–14,000 Mn in the current year, scaling up to INR 18,000 Mn by FY29E
2) Copper Clad Laminate (CCL) Division:
? First-mover advantage in India for domestic CCL manufacturing aimed at import substitution
? FY29 Vision: Target revenue of INR 7,500 Mn with strong margin accretion (~20% EBITDA and ~13% PAT)
? Consolidated FY29 Profile: Combined revenue aimed at INR 25,000 Mn, targeting an overall EBITDA margin of ~14% and PAT margin of ~10.5%
3) Industry Dynamics and Realisation Trends:
? Realisation Spurt: Realisation per CCL sheet surged from ~INR 1,260 (during initial project feasibility studies) to ~INR 5,500/sheet due to severe global short supply and raw material cost shifts
? Driven by this realisation, a single line could generate ~INR 6,000 Mn in top-line revenue (as compared to original multi-line projection for similar figures)
? Customer Base: Target clients include PCB manufacturers, such as Fine Line, Shobhini and CG Power
? Management Approach: The management is maintaining conservative baseline guidance until commercial production stabilises across quarters, after which guidance will be formally revised upwards
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SEBI Registration no.: INZ 000160131
