Confidence Boost: Crisil Backs Ratnamani Metals with ‘AA/A1+’ Ratings Again

Ratnamani Metals and Tubes has received a new vote of confidence from Crisil Ratings, which reconfirmed the long-term rating of the company at 'AA' and short-term rating at 'A1+' with a stable outlook. The move is a reflection of the company's sound business fundamentals, prudent financial profile, and strong market position, even though it is undertaking large-scale expansion.

 

Key Highlights:

 

Consistent Performance: Sales volume of Ratnamani grew 3% year-on-year in FY 2025 with improving volumes, albeit realizations were muted considering the softness in commodity prices. EBITDA margin declined from 18.2% of the previous year to 15.8% mainly due to a shift in the product mix from oil and gas projects, which have higher margins, to water applications.

 

Growth Prospects: Crisil expects Ratnamani's revenue to expand 8-10% over the medium term, led by a strong order book of ₹2,000 crore, improved production capacity, and rising contributions from subsidiaries. The company is investing ₹1,600 crore in capex with the emphasis on augmenting helical and longitudinal submerged arc welding capacity and expanding its subsidiaries and joint ventures.

 

Financial Strength: The company's capital structure is strong with indicative gearing and healthy debt protection ratios. Internal accruals will fund most of the proposed capex, and debt servicing at ₹40-50 crore in the medium term is manageable.

 

Risks Identified: Crisil had identified high working capital needs and exposure of the company to slowdown in large end-user industries as areas to monitor.

 

Collectively, the reaffirmed ratings reflect Ratnamani's position as a leader in the stainless steel pipes and tubes business, its diversified top-line platform, and its growth management and financial discipline.

 

Sources: Business Standard, Crisil, Stock Discovery