Future Outlook: Ratnaveer Precision Engineering stock sees strong growth in PAT, EBITA and more

The shares of the Micro-cap company, which specializes in the manufacturing and sale of a diverse range of stainless steel (SS) products, including finished sheets, washers, solar roofing hooks, pipes, and tubes, are in focus after management announced its aim to achieve Rs. 1,800 crore in revenue by FY2028.

With a market capitalization of Rs. 847.20 Crores, the shares of Ratnaveer Precision Engineering Ltd rose upto 2 percent, reaching a high of Rs. 163.45 compared to its previous closing price of Rs. 160.20.

Ratnaveer Precision Engineering at Glance

Ratnaveer Precision Engineering Limited is a Gujarat-based manufacturer of stainless steel products, including washers, sheets, and pipes & tubes. The company, established in 2002, is known for its high-quality products, a backwards-integrated manufacturing model that incorporates recycling, and a global customer base across various industries like automotive and solar power. 

The company manufactures tubes and pipes in both welded and seamless formats, offering high-quality finishes such as electro-polishing and bright annealing. With an annual capacity of 6,000 MT, it produced over 1,246 MT in FY25 and currently supplies its products to customers across 21 export countries.

The company serves a diverse range of industries, including automotive, solar power, wind energy, power plants, food processing, and pharmaceuticals. It operates five manufacturing units located in Savli, Waghodia and Ahmedabad, supporting its production and supply capabilities across these sectors.

Guidance of Ratnaveer Precision Engineering Ltd

According to the company’s recent conference call update, Ratnaveer Precision Engineering Ltd has provided strong guidance with a strong growth outlook, with FY26 revenue expected between Rs 1,050–1,100 crore, an EBITDA margin of 10.5–10.8 percent , and a PAT margin of around 6 percent plus. 

For FY27, revenue is projected at Rs 1,500 crore with an EBITDA margin of approximately 13.5 percent. Looking ahead to FY28, the company anticipates achieving Rs 1,800 crore in revenue through organic growth.

Capex Roadmap and Utilisation

The company has completed Rs. 48 crore of capex to get the new products ready and allow customers to begin using the products, and ensure operations were fully prepared and as of February and is now operating at 80–90 percent utilization. 

A new core capex of Rs 68 crore, focused on tubes, circlips, fasteners, and solar, is slated to commence by late November to early December FY26, with commissioning targeted by July 2026. Along with it, the Copper Clad Laminates (CCL) project is expected to start by mid-December and be completed by July 2026.

New Business: Copper Clad Laminates (CCL)

The company is entering the Copper Clad Laminates (CCL) business, leveraging a first-mover advantage in a market that is currently 100 percent import-dependent. CCL serves as a fundamental raw material for PCB manufacturing and has broad applications across AI, automotive, mobile, and semiconductor sectors, essentially wherever circuit boards are used. 

Phase-1 economics per production line are attractive, with a capex of Rs. 45 crore, projected revenue of Rs. 108 crore, EBITDA of ~20 percent , and PAT of ~12 percent . The company aims to implement the first line by July 2026, with trial production over 60 days, targeting sales readiness by September.

Looking ahead, the scale plan includes installing five production lines over the next three years, supported by BIS compliance targeted by July. Management views CCL as a structurally transformative opportunity, driven by strong margins and the potential for significant import substitution.

Financials & Others

The company’s revenue rose by 24.30 percent from Rs. 230 crore to Rs. 286 crore in Q2FY25-26. Meanwhile, the Net profit rose from  Rs. 12 crore to  Rs. 15 crore during the same period.

The company demonstrates strong financial performance with a ROCE of 14.3 percent  and a ROE of 15.0 percent , indicating efficient use of capital. Its stock is trading at a P/E of 15.9, which is below the industry average of 21.4, suggesting potential undervaluation. The debt-to-equity ratio stands at a comfortable 0.51, reflecting a balanced capital structure.

Over the past five years, the company has delivered impressive profit growth, achieving a 45.4 percent  CAGR. Operational efficiency has also improved, as reflected in the reduction of debtor days from 34.2 to 26.8, indicating better receivables management and faster cash conversion.

Written by Sridhar J 

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Future Outlook: Ratnaveer Precision Engineering stock sees strong growth in PAT, EBITA and more appeared first on Trade Brains.