Ratnamani Metals (RATNAMANI)
CyclicalFairStock Score: 30/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹2,352 |
| Market Cap | ₹16,485.64 Cr |
| P/E Ratio | 38.17 |
| ROCE | 21.51% |
| ROE | 16.99% |
| Dividend Yield | 0.43% |
| Profit Growth | -62.71% |
| Debt/Equity | 0.08 |
| Sales Growth | -30.18% |
| Free Cash Flow | ₹148 Cr |
| Promoter Holding | 59.77% |
| 52-Week Range | ₹1,936.5 — ₹3,345 |
| Sector | Industrial Products |
| Book Value | ₹586.46 |
Strengths
- Five-year revenue CAGR of 17.68% shows strong historical growth.
- Very low debt-to-equity of 0.06 and positive free cash flow of ₹148 Cr.
- ROE of 16.99% and ROCE of 21.51% indicate efficient capital use.
- Promoter holding of 59.77% aligns management with minority shareholders.
- Latest quarter net profit margin is roughly 12.7%, resilient despite the slowdown.
Concerns
- Sales growth of -19.03% and profit growth of -7.83% signal a cyclical downturn.
- P/E of 28.87 and P/B of 5.13 appear expensive against falling earnings.
- Piotroski F-Score of 3/9 points to deteriorating financial health.
- Dividend yield of 0.57% provides very limited income support.
AI Analysis
Ratnamani is a metal business in a capital-intensive, cyclical industry. The balance sheet is impressive: debt to equity is a mere 0.06, free cash flow is ₹148 Cr, and promoter holding is a solid 59.77%. With ROE of 16.99% and ROCE of 21.51%, the business has proven it can earn attractive returns on capital. The five-year revenue CAGR of 17.68% shows strong past execution. Yet I must pay attention to the latest turn: sales fell 19.03% and net profit fell 7.83%. In a cyclical business, falling sales often compress margins with a lag, and the Piotroski F-Score of 3/9 is a warning that financial health is weakening. The latest quarter shows net profit of ₹135 Cr on sales of ₹1,066 Cr, roughly a 12.7% margin, which is respectable, but one quarter does not establish a trend. Value, as my friend Benjamin Graham says, is not a high multiple of peak earnings. At ₹2,459.80, the P/E is 28.87 and price-to-book is 5.13. That is a rich price for a company whose sales are contracting. The stock has already fallen from its 52-week high of ₹3,345 to ₹2,459.80, but a stock that has fallen can still be too expensive. The dividend yield of 0.57% offers little downside support. The FairStock score of 32 labels it risky, and I agree. This is a quality cyclical business with a conservative balance sheet, but I cannot call it a bargain. I would need to see sales stabilise, margins hold, and the price offer a wider margin of safety before acting.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer