Ratnaveer Precision Engineering is a buy for 36% upside
Posted: Fri Nov 15, 2024 11:09 am
Ratnaveer Precision Engineering (RPEL), is a Gujarat based stainless steel (SS) product manufacturer focused on producing finished sheets, washers, solar roofing hooks, pipes and tubes
• The company operates out of four manufacturing units in Gujarat with total manufacturing capacity stood at 30000 tonnes as of FY24. SS finishing line sheets contributed ~47% to total revenues in FY24 followed by SS washers (~23%), tubes & pipes (~17%), sheet metal components (~8%) and SS fasteners & components (~5%)
• With strong demand traction, capacity expansions and favourable product mix, we expect company’s operational performance to improve significantly over the next 2-3 years. We estimate revenue CAGR at ~24% CAGR over FY24-27E while EBITDA/PAT to grow at ~45%/~47% CAGR over the same period, led by improvement in margins
• We maintain Buy rating on RPEL with a revised target price of ₹ 290 (based on 20x P/E to FY26E EPS)
• The company operates out of four manufacturing units in Gujarat with total manufacturing capacity stood at 30000 tonnes as of FY24. SS finishing line sheets contributed ~47% to total revenues in FY24 followed by SS washers (~23%), tubes & pipes (~17%), sheet metal components (~8%) and SS fasteners & components (~5%)
• With strong demand traction, capacity expansions and favourable product mix, we expect company’s operational performance to improve significantly over the next 2-3 years. We estimate revenue CAGR at ~24% CAGR over FY24-27E while EBITDA/PAT to grow at ~45%/~47% CAGR over the same period, led by improvement in margins
• We maintain Buy rating on RPEL with a revised target price of ₹ 290 (based on 20x P/E to FY26E EPS)