Rama Steel Tubes shares surge on strong Q1 FY24 Results

Rama Steel Tubes, an iron and steel products manufacturer, has reported a strong set of financial results for the first quarter of fiscal year 2024 (Q1 FY24). The company’s revenue grew by 30% year-on-year (YoY) to Rs 312.52 crore, while its net profit jumped by 76% to Rs 7.46 crore. The company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 71.60% YoY to Rs 17.1 crore, while its EBITDA margins expanded by 138 basis points (bps) to 5.48%. 

The company’s strong performance was driven by a number of factors, including a significant increase in sales volume, which grew by 62.35% YoY. The increasing demand for steel tubes and pipes across various industries. The company’s proactive approach to strategically capitalizing on upcoming opportunities. However, the company’s margins were impacted by the downward pressure on steel prices and the increase in the supply of Chinese steel in India. 

Despite these challenges, the company expects steel prices to stabilize by the end of FY24, which should help to improve its margins. The company also entered into a partnership with JSW Steel, a leading Indian steel manufacturer. This collaboration will help the company to procure substantial quantities of Hot Rolled Coils (HRC) from JSW Steel, which will help to improve its supply chain and reduce its costs. 

Rama Steel Tubes is an accredited organization specializing in manufacturing, supplying, and exporting steel pipes, tubes, and fittings. With a 20% export rate, the company has a global presence in countries like the UK, UAE, Sri Lanka, Ethiopia, Kenya, Uganda, Ghana, Kuwait, the Republic of Congo, Yemen, Guyana, Germany, USA, South Africa, Zambia, and Malta.  

The shares are currently trading at Rs 38.34, up by 0.31 points or 0.82% from its previous closing of Rs 38.03 on the BSE. The scrip opened at Rs 38.34 and has touched a high and low of Rs 38.89 and Rs 38.11 respectively. The stock made a 52-week high of Rs 46.10 and a 52-week low of Rs 19.02. So far 45,805 shares were traded on the counter.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.