RAMA STEEL TUBES 2023-24 Annual Report Analysis

Tue, 1 Oct

RAMA STEEL TUBES has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

RAMA STEEL TUBES Income Statement Analysis

• Operating income during the year fell 21.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 5.7% in FY24 as against 4.0% in FY23.
• Depreciation charges increased by 19.3% and finance costs increased by 5.1% YoY, respectively.
• Other income declined by 36.6% YoY.
• Net profit for the year grew by 9.3% YoY.
• Net profit margins during the year grew from 2.1% in FY23 to 2.9% in FY24.

RAMA STEEL TUBES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	13,368	10,465	-21.7%
Other income	Rs m	68	43	-36.6%
Total Revenues	Rs m	13,436	10,508	-21.8%
Gross profit	Rs m	531	601	13.2%
Depreciation	Rs m	47	56	19.3%
Interest	Rs m	202	212	5.1%
Profit before tax	Rs m	350	375	7.3%
Tax	Rs m	75	75	0.1%
Profit after tax	Rs m	274	300	9.3%
Gross profit margin	%	4.0	5.7
Effective tax rate	%	21.5	20.1
Net profit margin	%	2.1	2.9

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RAMA STEEL TUBES Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 4 billion as compared to Rs 4 billion in FY23, thereby witnessing an decrease of -9.5%.
• Long-term debt down at Rs 273 million as compared to Rs 320 million during FY23, a fall of 14.6%.
• Current assets rose 12% and stood at Rs 6 billion, while fixed assets fell 15% and stood at Rs 1 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 7 billion as against Rs 7 billion during FY23, thereby witnessing a growth of 6%.

RAMA STEEL TUBES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	2,255	3,333	47.8
Current Liabilities	Rs m	4,015	3,636	-9.5
Long-term Debt	Rs m	320	273	-14.6
Total Liabilities	Rs m	6,977	7,387	5.9
Current assets	Rs m	5,409	6,057	12.0
Fixed Assets	Rs m	1,564	1,329	-15.0
Total Assets	Rs m	6,977	7,387	5.9

RAMA STEEL TUBES Cash Flow Statement Analysis

• RAMA STEEL TUBES's cash flow from operating activities (CFO) during FY24 stood at Rs 181 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -8 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -125 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 48 million from the Rs -61 million net cash flows seen during FY23.

RAMA STEEL TUBES Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	-962	181	-
Cash Flow from Investing Activities	Rs m	-532	-8	-
Cash Flow from Financing Activities	Rs m	1,433	-125	-
Net Cash Flow	Rs m	-61	48	-

Current Valuations for RAMA STEEL TUBES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.2, an decline from the EPS of Rs 0.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 14.9, stands at 78.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.9 times, while the price to sales ratio stands at 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 57.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	28.7	6.8
TTM Earnings per share	Rs	0.6	0.2
Diluted earnings per share	Rs	0.2	0.2
Price to Cash Flow	x	44.8	57.5
TTM P/E ratio	x	53.1	78.2
Price / Book Value ratio	x	21.8	6.2
Market Cap	Rs m	49,086	20,501
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for RAMA STEEL TUBES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY24, from 1.3x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 2.8x during FY24, from 2.7x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 9.0% during FY24, from 12.2% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 16.3% during FY24, from 21.4% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 6.9% during FY24, from 6.8% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.3	1.7
Debtors’ Days	Days	635	755
Interest coverage	x	2.7	2.8
Debt to equity ratio	x	0.1	0.1
Return on assets	%	6.8	6.9
Return on equity	%	12.2	9.0
Return on capital employed	%	21.4	16.3

To see how RAMA STEEL TUBES has performed over the last 5 years, please visit here.

RAMA STEEL TUBES Share Price Performance

Over the last one year, RAMA STEEL TUBES share price has moved up from Rs 11.9 to Rs 14.9, registering a gain of Rs 3.0 or around 25.6%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 34,545.6 (down 0.2%). Over the last one year it has moved up from 23,206.3 to 34,545.6, a gain of 11,339 points (up 48.9%).

Overall, the S&P BSE SENSEX is up 27.5% over the year.

(To know more, check out historical annual results for RAMA STEEL TUBES and quarterly results for RAMA STEEL TUBES)