Stock Market update: Rama Steel Tubes Ltd shares up by 5% on stronger outlooks

The company has rolling orders from its customers through a distribution and dealership network, which provides revenue visibility in the medium term.

Shares of Rama Steel Tubes Limited (RSTL) hit their 52-week high and were stuck at the 5 per cent upper circuit at Rs 412.90 on BSE Sensex on Thursday as the weak market on the improved demand outlook. Since December last year, the shares of the Iron and Steel industry have gained over 89 per cent from levels of Rs 218.25.

Till 12:55 pm; a combined order of 1,51,228 equity shares had changed the scenario for the company’s shares which rose to 5 per cent on the upper circuit on the NSE and BSE. In comparison, the S&P BSE Sensex was down by 1.23 per cent at 59,480.14.

The company is a leading manufacturer in the Steel & Tubes industry. Rama Steels Tubes Ltd. has its offerings which include MS ERW black pipes from 15mm to 20mm diameter pipes and G.I. pipes from 15mm to 150mm NB in light, medium and heavy sizes. The company has also subsidiaries in UAE and Nigeria which have strengthened its presence in the western markets.

Recently a credit-rating agencyBrickwork Ratings (BWR), has upgraded the RSTL’s Long-term rating from BBB with a Stable outlook and short-term rating to BWR A3+ for the bank loan facilities of the company.

The agency further added, “The outlook was improved on account of its improvement in the credit profile and the demand for various sectors such as infrastructure, irrigation and telecom etc. The company’s order book from its customers through its dealer network also makes a case for its revenue visibility in the medium term.”

RSTL reported revenue from operations of Rs 470 crore as of December 2021 against Rs 353 crore in the previous fiscal. The company saw a jump in its profit of Rs 12.38 crore as of December 2021 against Rs 0.43 crore in the previous fiscal. Meanwhile, the company is also planning to 30,000 metric-tonnes-per-annum (MTPA) at its Khopoli Plant, Maharashtra. The total installed capacity at the unit will be 132,000 MTPA after the expansion will take place.

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