Rama Steel Tubes’ shares, a key player in India’s steel industry, have been on a roll. The stock hit the 20% upper circuit limit today, continuing a strong performance from the previous session where it gained 10%. In just two days, the shares have risen by 32%.
This recent surge is driven by positive news for the company. On Wednesday, Rama Steel Tubes announced a new partnership with Onix Renewable Ltd. This deal will help both companies work on solar energy projects. Rama Steel Tubes will provide steel structures needed for these projects, including parts for solar trackers.
Expanding into Green Energy and Defence
The company is also expanding into the green energy sector by developing specialized steel structures for solar projects. They aim to provide high-quality products that are crucial for long-term solar energy success.
In addition, Rama Steel Tubes is entering the defense sector. They’ve set up a new subsidiary, Rama Defence Private Limited, to handle defense equipment and related products.
Strong Global Presence
Rama Steel Tubes, established in 1974, is a leading manufacturer of steel pipes and tubes. The company has a strong international presence, with operations in over 16 countries. Exports make up 10-20% of their business.
They have a subsidiary in the UAE and a step-down subsidiary in Nigeria, strengthening their global footprint. The company produces 294,000 metric tonnes of steel annually and plans to increase this to 394,000 metric tonnes by FY25.
Recent Developments
In July 2023, Rama Steel Tubes signed a deal with JSW Steel to procure hot-rolled coils and distribute JSW Steel products in the western region of India. They will also produce pre-galvanized pipes under the “JSW Kalinga” brand.
Looking ahead, the steel industry is expected to grow significantly. The government’s National Infrastructure Pipeline (NIP) is investing USD 1.4 trillion between FY19 and FY25, which will boost the steel sector.
Financial Performance
For the June quarter, the company’s revenue was ₹216.64 crore, down from ₹312.50 crore the previous year. Net profit was ₹6.20 crore, compared to ₹7.46 crore before.
For FY24, Rama Steel Tubes reported revenue of ₹1047 crore and a net profit of ₹30 crore, up from ₹27 crore in FY23. They also saw a big increase in sales volume, rising to 198,902.23 metric tonnes in FY23 from 106,943.41 metric tonnes in FY22.
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