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Buy This Small-Cap Multibagger Metal Stock For 25% Strong Gain, 700% Final Dividend

Leading brokerage firm ICICI Securities has given a buy rating to the stock of Ratnamani Metals & Tubes Ltd for a potential gain of 25% if you buy it at its current market price of Rs 1573.35 apiece.

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Leading brokerage firm ICICI Securities has given a buy rating to the stock of Ratnamani Metals & Tubes Ltd for a potential gain of 25% if you buy it at its current market price of Rs 1573.35 apiece. Ratnamani Metals and Tubes (RMTL) has an impressive capital allocation strategy and best in class operating margins and return ratios.

 

1. Stock Outlook

1. Stock Outlook

The current market price of the stock is 1573.35 apiece. ICICI Securities has recommended investors to buy the stock at its current price to receive 25% potential gain. Investors can get a target price of 1967 in a target period of 12 months. The stock's 52-week high was Rs 1913 apiece and 52-week low was 1168 apiece, respectively.

Multibagger returns: The stock has given strong returns to investors. In one year, it has given a return of 14% and in 5 years, it has given a return of 179%.

Current Market PriceRs 1573
Potential Gain25%
Target PriceRs 1967
52-Week HighRs 1913
52-Week LowRs 1168
1-Year Return14%
5-Year Return179%
Ratnamani Metals & Tubes Ltd declared final dividend of 700%
 

Ratnamani Metals & Tubes Ltd declared final dividend of 700%

Ratnamani Metals and Tubes has announced an equity dividend of 700.00% amounting to Rs 14 per share.

The board of directors of Ratnamani Metals in their BSE filing as on May 18, 2022 said, "The Board has recommended a Dividend of Rs.14.00 per Equity Share (i.e. @ 700%) on 4,67,28,000 Equity Shares of Rs.2.00 each (pre-bonus) to the members, which translates into dividend of Rs.9.33 per equity share, having face value of Rs.2/- each (post-bonus), for the financial year ended on March 31, 2022, subject to the approval of the Members at the ensuing 38th Annual General Meeting of the Company. The dividend, if approved by the members at the ensuing AGM, would be paid to the members subject to deduction of tax at source, on or before September 8, 2022." The ex-dividend date is 01-08-2022.

It has regularly declared dividend for the past five years.. At the current share price of Rs 1573.35 this results in a dividend yield of 0.89%.

Bonus Announcement

Bonus Announcement

The company made an announcement of bonus share on May 18, 2022. The ratio was one bonus share for every two equity shares held, i.e, 1:2. The record date for the same is July 1, 2022 while the ex-date for the same is June 30, 2022 (today). Consequently, Ratnamani Metals and Tubes (RMTL) share price has been adjusted to opening price of Rs 1681/share from closing price of Rs 2521/share yesterday. Accordingly, our target price has also been revised to Rs 1967/share post this corporate action. According to ICICI Direct, "We have valued Ratnamani Metals and Tubes at 25x FY24E EPS of Rs 78.7. We maintain our BUY rating on the stock." 

4. Key triggers for future price performance

4. Key triggers for future price performance

Order book as on May 1, 2022 was at Rs 2223 crore (Rs 1912 crore as on February 1, 2022). As on May 1, 2022, stainless steel (SS) order book was at Rs 650 crore (Rs 666 crore as on February 1, 2022) while carbon steel (CS) orders were at Rs 1573 crore (Rs 1246 crore as on February 1, 2022). Over FY22-24E, we expect the topline to grow at a CAGR of 19% while EBITDA, PAT are expected to register CAGR of 26%, 31%, respectively.

About Ratnamani Metals & Tubes Ltd

About Ratnamani Metals & Tubes Ltd

The stock Ratnamani Metals & Tubes (RMTL) is a niche player with superior capabilities in the domestic industrial pipes and tube segment. RMTL manufactures a wide range of stainless steel and carbon steel pipes & tubes, which find application in key end user industries like oil & gas refineries, power, healthcare, etc. The market capitalisation is Rs 11,027 crore. 

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

 

Story first published: Saturday, July 2, 2022, 11:07 [IST]
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