Ratnaveer Precision Engineering (RATPRE)

CMP: ₹ 151 Target: ₹ 200 (+32%) Target Period: 12-18 months BUY
June 26, 2024

Riding on multiple tailwinds…

About stock: Ratnaveer Precision Engineering (RPEL), established in 2002, is a

Conviction Pick
Gujarat based stainless steel (SS) product manufacturer focused on producing
finished sheets, washers, solar roofing hooks, pipes and tubes

• The company operates out of four manufacturing units in Gujarat with total
manufacturing capacity stood at 30000 tonnes as of FY24 Particulars
Particular Amount
• SS finishing line sheets contributed ~47% to total revenues in FY24 followed
Market Capitalisation (Rs Crore) 732
by SS washers (~23%), tubes & pipes (~17%), sheet metal components (~8%)
FY24 Gross Debt (Rs Crore) 207
and SS fasteners & components (~5%)
FY24 Cash (Rs Crore) 60

Investment Rationale EV (Rs Crore) 880

52 Week H/L (Rs) 157 / 107
• Expansion of capacities; buoyant capex cycle to drive growth: We believe
Equity Capital 48.7
that RPEL is well positioned to benefit significantly from the buoyant
Face Value 10.0
industrial capex cycle scenario. Company’s product portfolio of stainless
steel (SS) finished sheets, washers, solar roofing hooks, pipes & tubes etc Shareholding pattern
Sep-23 Dec-23 Mar-24
has a wide usage across large number of industries. Going ahead, company
Promoter 55.5 55.5 55.5
plans to incur capex of ~₹ 106 crore over the next 12 months for expanding
FII 10.5 3.8 0.2
its capacities across the key product lines and augmenting the overall DII 0.0 0.0 0.0
product basket with new products (circlips, electro-polished and seamless

ICICI Securities – Retail Equity Research

Others 34.0 40.7 14.7
tubes & pipes and nuts & bolts). With this capex, company targets to meet
Price Chart
strong demand for its products, cater higher growth segments and increase
140
its market share in both domestic and export markets. Company expects 130

revenues of ~₹ 1150 crore by FY27E as it factors in additional ~₹ 400 crore 120

110
sales from this new capex of ₹ 106 crore 100
90
• Multiple drivers for margins expansion in place: Company’s expansion into 80

new lines of value-added products (like circlips, electro-polishing tubes & 70

60
pipes, nuts & bolts) and higher-margin segments like railways, defence, 50

energy etc would help in better volumes growth & realisations. Moreover, the 11-Sep-23 14-Dec-23 17-Mar-24 19-Jun-24

backward integration of manufacturing and usage of captive solar power RPEL BSE Small Cap Index

would help the company in achieving efficiency in the production process, Key risks Key Fin
reducing overall production costs and gaining competitive advantage
• Key Risk: (i) Availability of raw
Rating and Target Price materials (ii) Slowdown in
industrial capex (iii) High working
• We expect company’s operational and financial performance to improve
capital requirement (iv) High
significantly over the coming periods, given the strong growth opportunity
competitive environment
driven by buoyant capex, augmentation of capacities, improving product mix
and operational efficiencies Research Analyst Key Fi

• We estimate revenue CAGR at ~23% over the period FY24-26E. EBITDA and Chirag Shah
[Link]@[Link]
PAT are expected to increase by ~42% and ~44% CAGR over the same
period. Strong earnings growth would also translate into improvement in Vijay Goel
return ratios for the company during the period. We recommend Buy on [Link]@[Link]

RPEL and assign a target price of ₹ 200 (valuing it at 15x FY26 P/E)

Key Financial Summary

3 Year CAGR 2 Year CAGR
Rs crore FY21 FY22 FY23 FY24 FY25E FY26E
(FY21-24) (FY24-26E)

Revenues 360 427 480 595 18.3 719 906 23.3

EBITDA 20 28 46 50 35.9 69 101 41.8
EBITDA margin (%) 5.5 6.4 9.5 8.4 9.6 11.1
Net Profit 5 9 25 31 78.5 44 64 44.0
Diluted EPS (Rs) 1.1 2.0 5.2 6.4 9.1 13.3
P/E (x) 134.2 77.3 29.2 23.6 16.6 11.4
EV/EBITDA (x) 43.4 32.8 20.4 17.6 13.5 9.3
RoCE (%) 10.4 9.8 12.8 11.1 13.1 16.2
RoE (%) 9.6 14.4 23.6 12.3 14.9 17.9
Source: Company, ICICI Direct Research
 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Company Background
Ratnaveer Precision Engineering, established in 2002, is a Gujarat based stainless
steel (SS) product manufacturer focused on producing finished sheets, washers, solar
roofing hooks, pipes and tubes.

Company operates out of four manufacturing units in Gujarat, out of which three units
(Units I, II and III) are located at Vadodara and the fourth unit (Unit IV) is located at
Ahmedabad. Company manufactures SS finishing sheets, SS washers and SS solar
mounting hooks at its Unit I and SS pipes & tubes at its Unit II. Unit III and Unit IV are
dedicated for the backward integration process. Unit III is the melting unit where
company melts steel scrap and turn it into steel ingots and Unit IV is the rolling unit
where flat ingots are further processed to turn them into SS sheets which are the raw
material for SS washers

Total manufacturing capacity of the company stood at 30000 tonnes as of FY24 end
(which comprises of 21000 tonnes of SS finishing sheets capacity, 7000 tonnes of SS
washers & solar hooks capacity and 2000 tonne of SS tubes & pipes capacity)

The company’s revenue from operations has grown at 18.3% CAGR over the period
FY21-24 to ₹ 595 crore in FY24 from ₹ 360 crore in FY21. EBITDA and PAT have grown
at ~36% CAGR & ~78% CAGR during the same period to ₹ 50 crore and ₹ 31.1 crore
respectively in FY24

Exhibit 1: Product portfolio

Source: Company, ICICI Direct Research

Exhibit 2: Revenue mix – FY24

17%

Finishing Sheets

Washers
8%
47%
Solar Roofing Hooks

5%
Scrap Metals

Tubes & Pipes

23%

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 2

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Investment Rationale
Strong portfolio of stainless-steel industrial consumable products; Demand
expected to remain strong on buoyant capex cycle
Ratnaveer Precision Engineering, one of the leading manufacturers of Stainless Steel
(SS) sheets, washers, hooks, and tubes & pipes, is well positioned to witness strong
demand for its products led by buoyant capex cycle (including industrials and
infrastructure) from both public and private segments

Stainless Steel Sheets: Company’s SS sheet product portfolio comprise of a wide

range of finishing sheets and has a wide range of applications in sectors like
architecture, building & construction (ABC), automotive, railway & transport (ART),
food industry, process industry, and aerospace, among others. The corrosion
resistance attribute of the material, along with the ability to incorporate custom
finishes has helped increase the usage of SS sheet. Demand of SS sheets has been
increasing at a CAGR of ~13% over the last 5-6 years. Going ahead, demand for SS
sheets is expected to remain healthy at 10-12% CAGR over the next 5 years as per
industry reports, mainly driven by increasing usage in elevators, escalators,
commercial kitchens, bus bodies, metro and railways coaches etc

Exhibit 3: Application of SS finish sheets

Source: Company, ICICI Direct Research

Stainless Steel Washers: There are numerous uses of washers, as it mainly serves as
a spacer to absorb a shock and evenly distribute load of a fastener. The versatile
applications of washers along with various engineering products such as nuts, bolts,
and fasteners used in almost every industry has supported the demand for washers.
There are mainly three types of washers based on their features and application: plain
washers, lock washers, and spring washers. The company currently offer over 2500
SKUs of washers to their customers including inner ring washers, spring washers, nord
lock washers, retaining rings, internal tooth washers and external tooth washers of
different sizes and specifications

Amongst several type of washers available, washers made from SS steel are the most
widely used material in washers considering its better strength and superior corrosion
resistance attribute. These are widely used in automobile industry, residential,
commercial and infrastructure construction and in several other manufacturing and
utility sector. Going forward too, the demand for SS washer is expected to be driven
by buoyant industrial capex (including sectors like automobile, chemicals, oil & gas,
fertilizers, pharma, petrochemical, power, sea water equipments, and many other
engineering applications), rapid urbanization (which has accelerated the pace of the
infrastructure developments) and real estate construction

ICICI Securities | Retail Research 3

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Exhibit 4: Application of SS washers

Source: Company, ICICI Direct Research

Stainless Steel tubes & Pipes: SS pipes and tubes are one of the important products
in the steel industry and they find wide application in oil & gas, capital goods, power
and several other. In the industrial sector, it is used in the manufacturer of the heat
exchanger, condensers, and similar industrial equipment that are further used in
chemical plants, fertilizer plants, pharmaceuticals, sugar, dairy & dairy products, water
desalination and automotive industry amongst other. Additionally, SS pipes & tubes
also find application in construction sector also.

“Oil & gas” and “chemical & petrochemical” industry are the two largest consumers of
steel pipes and tubes and are driving the demand across the world. Demand for SS
pipes & tubes is expected to remain strong on the back of substantial government
expenditure planned in major end user industries

Exhibit 5: Application of SS tubes & pipes

Source: Company, ICICI Direct Research

Overall, we believe that strong capex cycle across the industrial and infrastructure
segments (led by both public and private capex) presents substantial opportunities for
the company’s products in domestic markets. Moreover, India’s emergence as one of
the best choices in manufacturing industrial products & components provides a sizable
opportunity to company to increase its exports share

ICICI Securities | Retail Research 4

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Expansion of manufacturing capacities to drive growth

As of FY24, company’s overall capacity stood at 30000 tonnes and production at
23027 tonnes (which implies ~77% capacity utilisation). Company’s four
manufacturing units are strategically located with availability of transportation, which
facilitates convenient transportation of its products. Moreover, company incorporates
an in-house backward integrated manufacturing facility, which makes it independent
to manufacture any product size at any time

During the year, revenues for the company grew by ~24% YoY to ₹ 595.4 crore. In
terms of revenue mix, SS finishing line sheets contributed ~47% to total revenues in
FY24 followed by SS washers (at ~23%), tubes & pipes (at ~17%), sheet metal
components (at ~8%) and SS fasteners & components (at ~5%). In terms of
geographical mix, ~92% of the company’s revenue is from domestic markets and
balance ~8% from exports

Exhibit 6: Total capacity expanded to 30000 tonne in FY24 (~9% CAGR over FY21-24)
35000
30000

30000
2000
23300
25000 2000 2000
7000
2000 6000
5500
tonne

20000
4800

15000

10000 21000
18500 18600
16500
5000

0
FY21 FY22 FY23 FY24

SS Finishing Sheets SS Washers & solar hooks SS Tubes & pipes

Source: Company, ICICI Direct Research

Company has an in-house R&D facility at one of its manufacturing units, wherein it
develops tools and moulds for its products. To enhance its product offerings, company
has leveraged its manufacturing ability to evolve by virtue of investing in the Research
& Development (R&D) activities. Company is focused on undertaking dedicated R&D
in its existing products and development of new products and designs in areas where
there is significant growth potential and would cater to needs of our customers

Going ahead, company plans to incur capital expenditure of ~₹ 106 crore over the
next 12 months for expanding its manufacturing capacities across the key product
lines and augmenting the overall product basket. With this capex, company targets
to meet strong demand for its products, cater higher growth segments and increase
its market share in both domestic and export markets

The capex is planned in two phases 1) ~₹ 46 crore in phase 1 which is expected to be

completed by Q2FY24 and 2) ~₹ 60 crore in phase 2 which is expected to be completed
by Q1FY25. Apart from the capacity additions and new products addition, company is
also in process of installing 4 MW of captive solar power (2 MW each in phase 1 & 2)

In the phase 1 capex, company is increasing its overall capacity in washers, fasteners,
nuts & bolts and pipes & tubes. In washers segment, company is expanding portfolio
of SS washers by adding “circlips” into the product line. In tubes & pipes product
line, company is in process of expanding the capacity and its product portfolio by
adding EP (electro-polishing) tubes & pipes. In fasteners segment, company is
strategically adding a nuts & bolts product line with a focus on forward integration

ICICI Securities | Retail Research 5

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

In phase 2 capex, company plans to further increase its capacities in fasteners and
pipes & tubes. In pipes & tubes, company plans to add seamless pipes as a new
product and thus augmenting backward integration in the segment. Company expects
to touch revenues of ~₹ 1150 crore by FY27E as it factors in additional ~₹ 400 crore
sales from this new capex of ₹ 106 crore

Multiple drivers for margins expansion in place led by operational

efficiencies and increasing share of better-margin products & markets
With focus on expanding product portfolio into better-margin new products,
expanding into higher-margin geographies and operational efficiencies, we believe
that company’s margins are set to improve substantially from the current levels

Expanding geographical reach with better-margins better-margin segments like

railways, exports: Company’s expansion into new product lines (like circlips and
electro-polishing tubes & pipes) would help the company in getting better price
realisations considering that the products are value-added products

Moreover, with the focus on continuous innovation and expansion into new value-
added products, company targets to expand into high-margin segments like
automobiles, railways, defence, energy etc in the coming periods. Moreover, company
intends to expand its presence into margin-accretive regulated markets such as
Europe, Asia Pacific, USA & North America, Australia and Japan. Company targets to
increase its exports share to ~55% of total revenues in the coming period (from ~8%
in FY24). Thus, on account of this, we believe that company’s overall price realisations
are expected to improve considerably in the coming period

Backward integration: Company has developed a synergistic system of backward

integration whereby it processes the waste (being generated in manufacturing of its
products) for converting back into the raw material (which is utilized again in
manufacturing). Thus, the raw material required is also being generated in-house,
while the waste being produced in the manufacturing process is being completely
utilized, ensuring economies of scale and minimal wastage. Currently, 11-12% of the
company’s raw material requirement is generated through backward integration

This backward integration helps the company in achieving efficiency in the production
process, gaining competitive advantage, reducing in product costs, control over supply
of raw materials and reduce its dependency on third parties for its operations
Exhibit 7: Company’s backward integration process

Source: Company, ICICI Direct Research

Usage of captive solar power: As mentioned earlier, company is also in process of

installing 4 MW of captive solar power (2 MW each in the two capex phases). With
this, company targets to meet ~80% of total power consumption. We believe that
company’s power cost is expected to come down significantly post the installation of
this captive power capacity and would help in improving margins. In terms of cost
savings, we estimate power cost savings at ~0.7% of sales (on FY26E revenues)

ICICI Securities | Retail Research 6

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Key Financial Summary

Revenue growth expected to remain strong at ~23% CAGR over FY24-26E
Company’s revenue grew at ~18% CAGR over the period FY21-24 to ₹ 595 crore in
FY24, led by ~5% CAGR in sales volumes and ~12% CAGR in net realisations

Going ahead, we estimate revenue growth to remain strong at ~23% CAGR over FY24-
26E to ₹ 906 crore in FY26E, as the volume growth is expected to remain healthy (on
strong demand, expanding capacities and expanding product portfolio)

Exhibit 8: Healthy revenue growth ahead

1,000 30.0
26.0
24.1
25.0
800 20.8
18.7
20.0
600
12.4
15.0
906
400
719 10.0
595
427 480
200
5.0

0 0.0
FY22 FY23 FY24 FY25E FY26E

Revenues (Rs Crore) YoY (%) - RHS

Source: Company, ICICI Direct Research

Margins to improve significantly; EBITDA expected at ~42% CAGR (FY24-6E)

Company’s EBITDA increased by ~36% CAGR over FY21-24, led by healthy revenue
growth and considerable improvement in EBITDA margins (8.4% in FY24 as against
5.5% in FY21)

Going ahead, we estimate EBITDA margins to improve further to 11.1% by FY26E (led
by improvement in share of better-margin products, increasing contribution from
higher margin target segments and operational efficiencies etc). We estimate EBITDA
CAGR at ~42% over FY24-26E to ₹ 100.5 crore in FY26E
Exhibit 9: EBITDA & EBITDA margin trend
14.0
100.5
100.0
11.1 12.0
9.5 9.6
80.0 10.0
8.4 69.2

60.0 6.4 8.0

50.0
45.6
6.0
40.0
27.5
4.0
20.0
2.0

0.0 0.0
FY22 FY23 FY24 FY25E FY26E

EBITDA (Rs Crore) EBITDA Margin - RHS (%)

Source: Company, ICICI Direct Research

PAT expected to grow ~44% CAGR over FY24-26E

We expect company’s PAT to grow at ~44% CAGR over FY24-26E to Rs 64.4 crore in
FY26E (from Rs 31.1 crore in FY24), mainly led by sharp improvement in operational
performance during the period (as mentioned above)

ICICI Securities | Retail Research 7

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Exhibit 10: PAT expected to grow ~44% CAGR over FY24-26E

80.0 10.0

70.0 9.0
64.4
7.1 8.0
60.0
6.1 7.0
50.0 5.2 5.2 6.0
40.0 44.0 5.0
31.1
30.0 25.0 4.0
2.2 3.0
20.0
2.0
10.0 9.5
1.0
0.0 0.0
FY22 FY23 FY24 FY25E FY26E

PAT (Rs Crore) PAT Margin (%)

Source: Company, ICICI Direct Research

Return ratios to improve considerably over FY24-26E

The company plans capital expenditure of ₹ 106 crore over the next 12 months, mainly
for expanding capacities across the key product lines (adding new lines for newer
products). We believe that company’s asset turns on this new capex to remain strong
considering the robust demand for newer products with better realisations. Thus, we
expect strong earnings growth to translate into improvement in return ratios for the
company during the period FY24-26E

Exhibit 11: Return ratios to improve

25.0 23.6

20.0 17.9

14.4 14.9
15.0 12.3 16.2
13.1
10.0 12.8
11.1
9.8
5.0

0.0
FY22 FY23 FY24 FY25E FY26E

RoE (%) RoCE (%)

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 8

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Risk and Concerns

Availability of raw materials
Company’s major raw materials include stainless steel sheets, stainless steel coils,
stainless steel wire and stainless steel scrap. Company purchases of its raw materials
are concentrated from a few suppliers (over 60% of raw material is procured from top
3 domestic suppliers). Some part of raw materials and consumables are also imported
by the company (USA, Singapore, Malaysia, Hong Kong and UAE constituted the top
5 countries from which the company imports its raw materials). Moreover, company
doesn’t have long-term agreements with its raw material suppliers. Any delay in
procurement of raw materials by the company may impact its operational
performance and thus financial condition and cash flows

Slowdown in industrial and infrastructure capex in domestic and export

markets
Company’s revenue and profitability growth is primarily dependent on the demand of
SS fasteners, SS washers, SS tubes & pipes, SS finishing line sheets (in domestic and
export markets), which are dependent on public and industrial capex. Any slow-down
in the capex cycle in end user segments (Oil & Gas, Consumer, Engineering, Metals,
Pharma, Cement, Agro & Chemicals, Automobile etc) may hurt the demand for the
company’s products and thus revenues and profitability

Significant working capital requirements

Company’s business requires significant amount of working capital primarily as a
considerable amount of time passes between purchase of raw materials and collection
of receivables post sales to customers. As a result, company is required to maintain
sufficient stock at all times in order to meet manufacturing requirements as well as
extend credit period to customers as per the industry practice, thus increasing its
working capital requirements. Any mismanagement in working capital requirements
may impact company’s operations, financial condition and cash flows

Higher competitive environment

Company operates in a highly competitive & fragmented industry with low barriers to
entry. Company competes with a range of organized and unorganized players, both
at the national and regional level. Moreover, company’s competitors may further affect
its business by entering into exclusive arrangements with its existing or potential
clients. Any further significant increase in competition may impact company’s
operational and financial performance

ICICI Securities | Retail Research 9

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

Financial Summary

Exhibit 12: Profit and loss statement ₹ crore Exhibit 13: Cash flow statement ₹ crore

Year-End March FY23 FY24 FY25E FY26E Year-End March FY23 FY24 FY25E FY26E

Revenue 479.7 595.4 718.9 905.8 Profit after Tax 25.0 31.1 44.0 64.4
% Growth 12.4 24.1 20.8 26.0 Depreciation 4.0 5.8 8.6 13.6
Other income 1.4 7.0 8.2 8.2 Interest 12.3 12.1 13.0 13.6
Total Revenue 479.7 595.4 718.9 905.8 Cash Flow before WC changes 41.4 49.0 65.7 91.6
% Growth 12.4 24.1 20.8 26.0 Changes in inventory (34.5) (39.1) (30.8) (59.3)
Total Raw Material Costs 392.3 512.2 609.7 757.2 Changes in debtors (23.1) 18.6 (10.4) (11.9)
Employee Expenses 7.9 6.8 8.4 10.1 Changes in loans & Advances - - - -
other expenses 33.9 26.4 31.7 38.0 Changes in other current assets 1.2 (16.3) (3.6) (11.9)
Total Operating Expenditure 434.1 545.4 649.8 805.3 Net Increase in Current Assets (56.3) (36.7) (44.8) (83.1)
Operating Profit (EBITDA) 45.6 50.0 69.2 100.5 Changes in creditors (3.8) 6.5 9.2 13.8
% Growth 65.8 9.6 38.4 45.3 Changes in provisions 0.6 (1.1) 0.2 0.4
Interest 12.3 12.1 13.0 13.6 Net Inc in Current Liabilities (0.5) 2.7 10.7 16.3
PBDT 34.7 44.9 64.4 95.1
Depreciation 4.0 5.8 8.6 13.6 Net CF from Operating activities (15.4) 15.0 31.6 24.8
PBT before Exceptional Items 30.7 39.1 55.7 81.5
Total Tax 5.7 8.0 11.7 17.1 Changes in deferred tax assets - - - -
PAT before MI 25.0 31.1 44.0 64.4 (Purchase)/Sale of Fixed Assets (18.4) (66.0) (70.7) (10.0)
PAT 25.0 31.1 44.0 64.4 Net CF from Investing activities (15.9) (66.0) (70.4) (11.1)
% Growth 164.3 24.0 41.8 46.3
Diluted EPS 5.2 6.4 9.1 13.3 Dividend and Dividend Tax - - - -
Source: Company, ICICI Direct Research Net CF from Financing Activities 42.0 80.2 7.0 (13.6)

Net Cash flow 10.6 29.2 (31.8) 0.1

Opening Cash/Cash Equivalent 19.7 30.3 59.5 27.8
Closing Cash/ Cash Equivalent 30.3 59.5 27.8 27.9
Source: Company, ICICI Direct Research

Exhibit 14: Balance Sheet ₹ crore Exhibit 15: Key ratios

Year-End March FY23 FY24 FY25E FY26E Year-End March FY23 FY24 FY25E FY26E

Equity Capital 34.9 48.7 48.7 48.7 Diluted EPS 5.2 6.4 9.1 13.3
Reserve and Surplus 71.1 203.4 247.4 311.9 Cash per Share 6.3 12.3 5.7 5.8
Total Shareholders funds 106.0 252.1 296.1 360.6 BV 21.9 52.0 61.1 74.3
Total Debt 230.0 207.2 227.2 227.2 EBITDA Margin 9.5 8.4 9.6 11.1
Deffered tax Liab 4.7 5.7 5.7 5.7 PAT Margin 5.2 5.2 6.1 7.1
Total Liabilities 340.7 465.1 529.1 593.5 RoE 23.6 12.3 14.9 17.9
Gross Block 58.6 69.7 115.7 180.7 RoCE 12.8 11.1 13.1 16.2
Acc: Depreciation 23.7 29.6 38.2 51.8 RoIC 13.6 11.0 12.2 15.5
Net Block 34.9 40.1 77.5 128.9 EV / EBITDA 20.4 17.6 13.5 9.3
Capital WIP 8.8 45.3 70.0 15.0 P/E 29.2 23.6 16.6 11.4
Total Fixed Assets 58.9 119.0 181.1 177.5 EV / Net Sales 1.9 1.5 1.3 1.0
Non Current Assets 3.2 4.2 3.9 5.0 Sales / Equity 4.5 2.4 2.4 2.5
Inventory 205.8 244.9 275.8 335.0 Market Cap / Sales 1.5 1.2 1.0 0.8
Debtors 63.4 44.8 55.2 67.0 Price to Book Value 6.9 2.9 2.5 2.0
Other Current Assets 27.2 43.5 47.1 59.0 Asset turnover 1.4 1.3 1.4 1.5
Cash 30.3 59.5 27.8 27.9 Debtors Turnover Ratio 9.3 11.0 14.4 14.8
Total Current Assets 326.9 392.8 405.8 489.0 Creditors Turnover Ratio 12.2 14.6 14.8 15.1
Current Liabilities 37.4 44.0 53.2 67.0 Debt / Equity 2.2 0.8 0.8 0.6
Other Current Liab 10.9 7.1 8.6 11.0 Current Ratio 6.8 7.3 6.8 6.6
Total Current Liabilities 48.3 51.0 61.8 78.0 Quick Ratio 2.1 1.9 1.8 1.8
Net Current Assets 278.6 341.8 344.1 411.0 Source: Company, ICICI Direct Research
Total Assets 340.7 465.1 529.1 593.5
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 10

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

RATING RATIONALE
ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to
its stocks according -to their notional target price vs. current market price and then categorizes them as Buy,
Hold, Reduce and Sell. The performance horizon is two years unless specified and the notional target price is
defined as the analysts' valuation for a stock

Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%

Pankaj Pandey Head – Research [Link]@[Link]

ICICI Direct Research Desk,

ICICI Securities Limited,
Third Floor, Brillanto House,
Road No 13, MIDC,
Andheri (East)
Mumbai – 400 093
research@[Link]

ICICI Securities | Retail Research 11

 Conviction Pick | Ratnaveer Precision Engineering ICICI Direct Research

ANALYST CERTIFICATION
I/We, Chirag Shah, MBA (Finance), Vijay Goel, MBA (Finance), Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this
research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the
specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned
in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report.

Terms & conditions and other disclosures:

ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products.
ICICI Securities is Sebi registered stock broker, merchant banker, investment adviser, portfolio manager and Research Analyst. ICICI Securities is registered with Insurance Regulatory
Development Authority of India Limited (IRDAI) as a composite corporate agent and with PFRDA as a Point of Presence. ICICI Securities Limited Research Analyst SEBI Registration Number
– INH000000990. ICICI Securities Limited SEBI Registration is INZ000183631 for stock broker. Registered Office Address: ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi,
Mumbai - 400 025. CIN: L67120MH1995PLC086241, Tel: (91 22) 6807 7100. ICICI Securities is a subsidiary of ICICI Bank which is India’s largest private sector bank and has its various
subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of
which are available on [Link].

Investments in securities market are subject to market risks. Read all the related documents carefully before
investing.
Registration granted by Sebi and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. None of the research
recommendations promise or guarantee any assured, minimum or risk-free return to the investors.

Name of the Compliance officer (Research Analyst): Mr. Atul Agarwal

Contact number: 022-40701000 E-mail Address: complianceofficer@[Link]

For any queries or grievances: Mr. Prabodh Avadhoot Email address: headservicequality@[Link] Contact Number: 18601231122

ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have
investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities and its analysts, persons
reporting to analysts and their relatives are generally prohibited from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.

Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to
focusing on a company's fundamentals and, as such, may not match with the recommendation in fundamental reports. Investors may visit [Link] to view the Fundamental and
Technical Research Reports.

Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.

ICICI Securities Limited has two independent equity research groups: Institutional Research and Retail Research. This report has been prepared by the Retail Research. The views and
opinions expressed in this document may or may not match or may be contrary with the views, estimates, rating, and target price of the Institutional Research.

The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly
confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or
reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no
obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities
indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in
circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances.

This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness
guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe
for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not
treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment
or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make
their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of
independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates,
foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not
necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results
may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.

ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any
other assignment in the past twelve months.

ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report
for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger
or specific transaction.

ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the
companies mentioned in the report in the past twelve months.

ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts
did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither
ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report.

Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.

ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last
day of the month preceding the publication of the research report.

Since associates of ICICI Securities and ICICI Securities as a entity are engaged in various financial service businesses, they might have financial interests or actual/ beneficial ownership of
one percent or more or other material conflict of interest various companies including the subject company/companies mentioned in this report.

ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.

Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.

We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where
such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within
such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may
come are required to inform themselves of and to observe such restriction.

ICICI Securities | Retail Research 12