Ratnamani Metals & Tubes Limited (BOM:520111)
India flag India · Delayed Price · Currency is INR
2,834.00
+101.90 (3.73%)
At close: May 7, 2026
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Q2 22/23

Nov 11, 2022

Operator

Good day, ladies and gentlemen, and welcome to the Q2 FY 2023 Earnings Conference Call of Ratnamani Metals and Tubes Limited, hosted by Monarch Networth Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Thank you, and over to you, sir.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yeah. Hello, thank you, Michelle. So, good afternoon to everyone. On behalf of Monarch Networth Capital, we welcome you all for the Ratnamani 2Q FY 2023 earnings call. We are delighted to host the management of Ratnamani Metals today, and from their side, we have Mr. Prakash Sanghvi, MD and Chairman, Mr. Manoj Sanghvi, who is the Business Head, and also Mr. Vimal Katta, the Chief Financial Officer. So without taking any much time, I'll hand over the call to Mr. Manoj Sanghvi, for the opening remarks. Thank you, and over to you, sir.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah. Thank you, Sahil. Yeah, good afternoon to all the participants. I welcome you all to this call and hope everyone is doing good. Our results for the second quarter of FY 2023 have already been uploaded, uploaded on the exchanges, and I believe everyone has, has got a chance to go through it. As you all know, past few months, prices of steel has been broadly stable, resulting into resurgence of stalled projects. Further decline in the commodities may augur well for the infrastructure demand, and more traction may be expected in both CS and SS pipe segments. The developed economies are still facing high inflation, resulting in high interest rate outlook compared to our country, which is still reflecting strong macroeconomic scenario. Various expansion projects across refineries and process industries are likely to help us maintain the capacity, utilization, and order flow.

The traction for Specialty Pipes and Tubes is visible owing to higher energy prices also. Since you all are well updated on the various schemes in Water Pipes and Oil & Gas Transmission Lines and opportunities arising thereof, I would like to straightaway touch upon the quarterly financial numbers and business update in brief, and then we can take the questions. So on the operating revenue, it has increased by 26% year-on-year and is marginally down by 8% on sequential basis. Whereas on EBITDA, there is an increase to INR 154.77 crore from INR 120.50 crore. We are also confident to maintain the guidance of top line of INR 3,800 crore-INR 4,000 crore in the given financial year, with an EBITDA estimate of 15%-17%.

Our order book as on 1st October 2022 is INR 2,946 crores, which as on 1st November is roughly INR 3,200 crores. Our focus is to continue to be the leader in Stainless Steel Specialty Products and keep on expanding our existing lines of business, both vertically and horizontally. And for the purpose, we have already announced the CapEx of around INR 180 crores in Stainless Steel cold finishing facilities, as highlighted in May 2022 call. Also, with a view of having Carbon Steel pipe manufacturing facility in the eastern part of the country, we had announced the CapEx of roughly INR 150 crores. Both the projects are more or less progressing as projected.

However, there might be some delay in CapEx of Carbon Steel pipe manufacturing facility in the eastern part of India, which is, considering the recent order, what we received in Rajasthan, and some equipment are being shifted over there. Now, with regard to the transaction to acquire majority stake in Ravi Technoforge Private Limited, a Rajkot-based company, for which definitive agreements were executed on 5th October 2022, I would like to update you all that the acquisition for the first tranche, that is 53%, is completed. We have already provided details about the transaction structure on the exchanges. In order to add a new growth driver, both domestically and globally, with a blend of diversification, the company has forayed into this line and have decided to acquire majority stake at RTL. This will also help us to explore new segments, markets, and products.

We are well positioned to leverage our managerial, technical, and financial capabilities to scale its operation, making it more sustainable and further create long-term value for the shareholders. To conclude, I would like... I would once again emphasize that our philosophy has always been to consider any decision on a long-term vision, keeping sustainability and value creation in its core. That's all from our side. Now, I would like to invite questions, please.

Operator

Thank you very much. We will now begin the question- and answer- session. Anyone who wishes to ask a question may please press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.... Do you miss us star and one to ask a question? We have the first question from the line of Ashutosh Tiwari from Equirus Securities. Please go ahead.

Ashutosh Tiwari
Managing Director, Equirus Securities

Yeah, hi, am I audible?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes.

Operator

You are audible. Please proceed.

Ashutosh Tiwari
Managing Director, Equirus Securities

Yeah. So congratulations on the numbers. Firstly, on this Stainless Steel side, especially on export, how—like, how, what kind of demand scenario we are seeing? Are we like, say, what have you talked about two, three years back in terms of export opportunity with this new plant? Is it, is it happening on the same line that we probably are getting more orders from exports? And also domestic market, is the import substitution happening now. So how, how should we look at the Stainless Steel plant utilization level going ahead over two, three years?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So, on your first part, on the export side, we, we are seeing traction. The order book also, if you see, is at the highest level, both for Stainless Steel as well as Carbon Steel. The order inflow, both domestically as well as, for exports, the inflow is increasing at a gradual, pace.

Ashutosh Tiwari
Managing Director, Equirus Securities

So I mean, in what time frame are we probably just to utilize this 24-ton Hot Extrusion facility?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So this year it is 20%-30% utilization, and in three years we will be able to utilize maximum capacity.

Ashutosh Tiwari
Managing Director, Equirus Securities

two to three years time frame.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes.

Ashutosh Tiwari
Managing Director, Equirus Securities

Will it be a larger contribution from exports or domestic over here? And we had initially talked about distributors also you are tapping. So how is that volume growing, if you can throw some color on that?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

It will be a mix of both, export as well as domestic, and also, end users and projects as well as distributors.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay, okay. And, on domestic side, if you can highlight, let's say, which projects are, especially the ones where we probably are looking at more volumes in both, Carbon Steel and, and Stainless Steel.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So, for both Carbon Steel and Stainless Steel, a lot of Oil & Gas projects are there. Like, Reliance also recently announced a petchem expansion in Dahej for INR 75,000 crore. So there we, of course, the design is going on right now. So we expect a good amount of Carbon Steel Process Pipes, Stainless Steel Pipes. Then for all LNG expansion, a lot of Stainless Steel Welded Pipes will be required. So, and for Carbon Steel, of course, Oil & Gas, and other than Oil & Gas, a lot of traction is seen on the Water segment also for Gujarat projects.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay, okay. The last that we had won was Rajasthan, right? Or the-

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah. Last major order what we had was one single order, which was for Rajasthan. So where we are moving one Spiral Mill. So currently, we are supplying close to 10%, 15% from our plant in Kutch. Balance all will be manufactured in Rajasthan and supplied from there.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay, okay, okay. And Gujarat also there are some ratio there. There, as of now, there is no finalization, is it?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes. So there were three big projects, which is called SAUNI Yojana. So those some quantities will be finalized within this month.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay. So, I think we, few quarters back, you provided a pipeline, which is how much we bid for. Can you provide that number, how much we bid for as of now in, say, Oil & Gas and Water and, and a few segments also? The bidding that you've done already.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Stainless Steel, the ports are very, very small, in nature, so it is very difficult for me to highlight one particular project and say, INR 100 crore project. But yes, Carbon Steel, like SAUNI itself, is 2.5 lakh tons. Then there is Gujarat Water Infrastructure Limited, they have few projects. So all put together, right now, close to 300,000 tons, which is, which would in number terms, would be close to INR 3,000 crore, for Water, is under consideration in Gujarat.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay, okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Then we have few projects in Rajasthan and Punjab also. Now that we have a mill over there in Rajasthan, we might have some advantage for the projects in Rajasthan also.

Ashutosh Tiwari
Managing Director, Equirus Securities

So where we are located this mill?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

This mill will be near Jodhpur.

Ashutosh Tiwari
Managing Director, Equirus Securities

Jodhpur? Okay. But Punjab, can you get it? Like say, Punjab, we talked about.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

There is one project, which is coming in Ludhiana.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So which is, if you see proximity from Kutch to Ludhiana, of course, Jodhpur or Phalodi, where this plant will be, is much nearer. So our chances of getting better realization as well as the order increases.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay. On the Oil & Gas side, what kind of projects we have, like, what we have bid for a pipeline in terms of tons?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Right now, some few projects of IOCL are there. No, no major, big project is there, but there are various small, small projects. CGD requirement is there. IOCL has got two projects, one down south and one in the east, which is under bidding. Then there is one line of BPCL, which is there under bidding. So all put together, close to between 75,000 tons to 100,000 tons in Oil & Gas.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay, okay. Just on the Water side, historically, Water has been low order segment, but because now we're talking about big projects coming up, is it possible that the margins in Water can improve, or we should not assume the same?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes, in such, maybe it remains difficult a little bit, but with the advantage of geographical location, yes, margins can improve.

Ashutosh Tiwari
Managing Director, Equirus Securities

And lastly, on this Ravi Technoforge side, can you throw some color at how we probably are looking at growth over the next, two to three year period? And what kind of, margin improvement or cost-cutting opportunity exists over there?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Right now, at Ravi, the sales revenue for last year was close to INR 280 crore, with an EBITDA margin of close to 14%. We plan in next two to three years to have a revenue of INR 500-INR 600 crore and improving EBITDA margin by 200 basis points, approximately 2%, close to 16%.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

With the strength of Ratnamani and with the infusion done by Ratnamani, it seems to be possible.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay, okay. And, what would the mix for export and domestic for them as of now?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

30% is export and 70% is domestic. But if you see the final bearing which is manufactured, maybe it is total export is 60%.

Ashutosh Tiwari
Managing Director, Equirus Securities

Okay. Okay, okay, got it. Okay, that's all from my side. Thank you.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Thank you.

Ashutosh Tiwari
Managing Director, Equirus Securities

Thank you.

Operator

Thank you. Participants who want to ask a question, may please press star and one now. We have the next question from the line of Hiren Kumar Thakurlal Desai from an individual investor. Please go ahead.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Congratulations on a good set of numbers, sir. The question is, the oil prices are remaining firm, so can we assume that all the investments that were being planned in refining and everywhere where our products go are continuing? That's the first question.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah. Thank you. So yes, with oil price remaining at this level, of course, there we have, we have seen that new projects are being announced. Not only that, but the old projects which were stalled, revival is seen again. Now, question is, whether it takes six months or 12 months for them to complete the FEED, and then float the first NCO.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Okay. Sir, the second question is related to export opportunities. So as we, most of us are aware, the energy prices are rising in Europe, et cetera, and some kind of restrictions in China.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Mm-hmm.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Are we getting some improvement in terms of export opportunity? And if yes, are we sort of ready to use them in terms of capacity?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So we are seeing benefits of that. In the last call also, I had mentioned that some orders which were being manufactured in Russia or Ukraine are being diverted to other countries. Similar one order for carbon steel we had received. Similar, for stainless steel, also a lot of orders from Europe or other geographies, we have, we have started receiving.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Okay. So, I mean, what kind of a difference that can make, I mean, in terms of, growth opportunity?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Difficult to say, but yes, of course, it our margins can improve. Because right now, we this is a new market, additional market which has opened up, right? So because of constraints from supply, supply from Ukraine or Russia to Europe. So this. Yeah, so, we have more opportunities now, where in Europe, earlier, some customers who were buying from these markets have, in turn, came to us. And once they experience, the quality, the product and the services, and, we have had repeated customers. Once. So once they place an order with us, we feel that, again, if those markets start, still, some percentage of customers will remain with us.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Okay, that's good to know. And any effect in terms of China restrictions being there in China?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

...No, as such, we have no major raw material or anything coming from China, so there is no major impact to us.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Not much of a threat in terms of imports from China, right?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, not much of a threat also, and in between, stainless steel anti-dumping is already recommended. So as soon as the Finance Ministry approves, the further threat will be curtailed.

Hiren Kumar Thakurlal Desai
Shareholder, Private Investor

Okay. Thank you, thank you, sir. That answers my question. Thank you.

Operator

Thank you. Before we take the next question, a reminder to all the participants, anyone who wishes to ask a question may please press star and one now. We have the next question from the line of Manoj Bahety from Carnelian Asset Management. Please go ahead.

Manoj Bahety
Founder, Carnelian Asset Management

Hi, hi. Good afternoon, sir.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah, good afternoon.

Manoj Bahety
Founder, Carnelian Asset Management

Sir, two, three questions from my side. One is, as you just mentioned that right now Hot Extrusion is operating at around 20%-30% capacity utilization. And in your overall product mix also, I believe that SS proportion is small, and as we move ahead, it can be inched up. So just wanted to understand that as we, as the capacity utilization Hot Extrusion moves up and as the composition of SS will keep on going up, so can we expect a steady increase in EBITDA margins going forward? And if you can help us with what that range would be? In fact, if you can also explain that, what is the difference between margins on pure SS Hot Extrusion vis-a-vis each other. So that will be helpful, sir.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

That product-to-product margins is very difficult to analyze, because within Stainless Steel also, you would have some products where margins are low-

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

and some products which go to defense or other Aerospace sectors, where margins will be very, very high.

Manoj Bahety
Founder, Carnelian Asset Management

Sure.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So, on the margins, it is very difficult. On a broader picture, yes, the revenues for Stainless Steel will go up.

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

We have, with the existing capacity, we have potential to go up to INR 1,500 crore-INR 1,600 crore.

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Eventually, in next two years, when there is optimum utilization of capacities for extrusion-

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

We will reach there.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

But at the same time, because we will have distribution market, we will have projects. So the blended margin will remain around that 15%-17% EBITDA levels.

Manoj Bahety
Founder, Carnelian Asset Management

Okay, okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah.

Manoj Bahety
Founder, Carnelian Asset Management

Sir, where are we right now? As you mentioned, that SS will ultimately move to 1,500-1,600 over the next two years. Where are we right now?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Where are we?

Manoj Bahety
Founder, Carnelian Asset Management

SS, in terms of SS, vis-a-vis INR 1,500 crore-INR 1,600 crore, what is the current number, sir?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

This year, of our revenue, 30%-35% will be SS.

Manoj Bahety
Founder, Carnelian Asset Management

30%-35% will be SS. So, broadly, around INR 1,100-INR 1,200 crore is SS, right?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes, yes.

Manoj Bahety
Founder, Carnelian Asset Management

Which will move up to INR 1,500 crore-INR 1,600 crore. So this delta will come with the capacity utilization Hot Extrusion, which will ultimately be, means to some extent, mitigated by increase in the project-based revenue. That's what you are mentioning, right, sir?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, I could not understand your question.

Manoj Bahety
Founder, Carnelian Asset Management

So you mentioned that whatever margin expansion which will happen because of the scale-up Hot Extrusion and because of the increased proportion of SS, that will be to some extent neutralized by higher proportion of project revenue, which will be lower margin. Is my understanding correct?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, no, no, no.

Manoj Bahety
Founder, Carnelian Asset Management

Okay. You,

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

We have two major capacity utilization, which will happen in next two years.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

One is Stainless Steel Extrusion, another is also line pipes or project pipes.

Manoj Bahety
Founder, Carnelian Asset Management

Right, right, right.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Okay. So Stainless Steel, of course, within Stainless Steel also, because to utilize capacity, optimum capacity of extrusion, you will have to supply to project directly to the end user-

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

where margins will be reasonably good.

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

But you have to alternatively also supply to distribution network-

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

-where margins might not be as good as we supply to the end user.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Okay. And then we have also line pipes and project pipes. So there also, line pipes margins are a little different than what it is in the project pipes.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So blended, both put together, we can achieve 15%-17%.

Manoj Bahety
Founder, Carnelian Asset Management

15%-17%. Right, sir. And my second question is, is there a scope of Hot Extrusion to some other product segments also? Like right now, we are doing only for pipes and all. So is it possible to use this capacity for some other products also?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, it can be used for pipes only. But yes, pipes, then by adding certain equipment-

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

We can explore another market. So that is, that study is going on right now.

Manoj Bahety
Founder, Carnelian Asset Management

Okay, okay. And sir, last-

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Exploration market, we've seen that these pipes go, but there is further investment and equipment we need to add.

Manoj Bahety
Founder, Carnelian Asset Management

Okay, okay. But mainly it will be into pipes only or other products also? Like exploration, again, it will be pipes only, right?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

It is all, it is all pipes.

Manoj Bahety
Founder, Carnelian Asset Management

It will be only pipes, right? Yeah. Okay, okay. And, sir, I have one another question, which is mainly on the CapEx part. So, I think the current capacity we will be able to utilize in next one year. So if you can talk about, like, future expansion, capital allocation, organic, inorganic. So, looking at the kind of opportunities we are seeing across various segments, some perspective on that will be helpful, sir.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

As already informed, in my opening remarks, two major expansion is already planned. One is for stainless steel cold finishing, another is for spiral welded pipe plant, along with coating in the eastern part of India.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

These two together is roughly INR 300 crores-INR 350 crores.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

And then, of course, we have inorganic. We have invested in Ravi. Already INR 50 crore have been pumped in-

Manoj Bahety
Founder, Carnelian Asset Management

Mm-hmm.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

to the company, so that will also be utilized for expansion over there.

Manoj Bahety
Founder, Carnelian Asset Management

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah.

Manoj Bahety
Founder, Carnelian Asset Management

But sir, looking at the kind of cash flows which we are making, don't you think that this INR 300, INR 350, INR 50 crore is too small, right? Looking at the means now the quantum of free cash flows which we are generating.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So we are working on various things, various inorganic opportunities, various greenfield projects, backward, forward. So as and when the time is right, we will, we will let you know.

Manoj Bahety
Founder, Carnelian Asset Management

Sure, sir. Thank you so much for taking my question, and wish you all the best.

Operator

Thank you. Participants may press star and one to ask a question at this time. We have the next question from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Yeah. Hi, sir. Thank you so much for the opportunity. Sir, the first question is, this, INR 300-350 crores of two projects that you have spoken about, that the spiral pipe and the cold finish, on the SS part of it, what can be the asset terms over there?

Hello?

Operator

Hello? Sir, could you hear the question? Hello? Sir, let me check. Give me a moment, please. Ladies and gentlemen, the line of the management has been connected back. Sir, kindly proceed. Mr. Ghosh-

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Yeah, thank you.

Operator

Can you repeat the question?

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Yeah. I'll just repeat my question. For these two projects that you all are doing in terms of the spiral plant in the east and the cold finish facility for the SS part of it, for which you said INR 300 crore-INR 350 crore will be the CapEx, what should be the broad asset turn that should—one should assume from these two projects whenever they kind of stabilize and get to optimal utilization?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

1.5x-2x.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

1.5-2x. And you believe, what will be the broad timelines for these projects to get commissioned?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Stainless Steel, by, end of next, financial year.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Carbon Steel, we will update you in another three to six months, the timeline, because that might get a little delayed, considering what is happening in Rajasthan right now.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay. The margin profile will be similar to what you make or what you usually do for the current business, 15%-17%. Would that be the right assumption?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Both, put together, yes. But, if it's the Carbon Steel alone, that may be less, because it is only spiral welded pipes, right? So...

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Correct. Correct, correct. Okay, okay. And sir, just, one more thing. You've guided for about INR 3,800 crore-INR 4,000 crore of revenue in FY 2023. That is already factoring in the sharp decline in steel prices that we have seen. Is it?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes, that is after factoring in the decline in the steel.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay. And from there on, is it fair to assume that on a volume front, because one doesn't know how the commodity prices behave, but a 10% kind of a volume growth, given the ramp up of SS facility and the line pipe facility that you have put up, 10%-15% of volume growth, is it a fair assumption to make from on FY 2023 levels?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes. Our target is always close to 15%. 15%-20%, but with the base increasing now, 10%-15%, yes.... we can consider it.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay, okay. So the other thing is, sorry, your export as a proportion, if I just broadly look at the order, is broadly hovers around anything in the region of 15%-20%. But what is happening around the globe in terms of, you know, given the higher energy prices and realignment of pipeline CapEx, you think, this export, which is 15%-20% of overall order backlog, can see meaningful shift, or is it likely to remain in this range only? Any thoughts, sir?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

It would remain close to 20-25% at max.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay. So you're seeing traction both in export and domestic?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Until and unless one major project for Carbon Steel, if you receive, then you can see a major shift. But then, majority of our exports is for Stainless Steel. And at times, for few projects, we get Carbon Steel.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay, okay. Sir, your export margins, are they meaningfully different from that, that you get in domestic because of the rupee depreciation and other things? Do you enjoy better margins there?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, no. The margins are similar only. As per the policy, hedge or a natural hedge, whichever is there, is already there. So, ma, we are not playing on the currency risk or gain.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay. So margins are similar. It's just that it gives you more of operating leverage and, more diversification from the domestic market.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes.

Abhishek Ghosh
Fund Manager, DSP Mutual Fund

Okay. Okay, okay. And, sir, I had a question on cash flow, but I think you've already referred to that. So thank you so much, and wish you all the best. Thank you so much.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Thank you.

Operator

Thank you. We have the next question from the line of Sahil Sanghvi from Monarch Capital. Sorry, Monarch Networth Capital. Please go ahead.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yeah. So you said, what would be the CapEx target to be spent this year and the next year? If you can guide me on that.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Close to INR 120 crore this year.

Operator

I'm sorry to interrupt. Sir, can you please repeat that? Because we couldn't hear you properly.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah. Close, close to INR 125 crore this year.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

This year. And next year will be similar or...?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah, INR 150 crore-INR 175 crore next year.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

And, the acquisitions for Ravi, the spending for that will be separate, right? Over and above this.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah, that will be over and above this.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Okay, okay, okay. Got it. Got it. Thank you so much.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Thank you.

Operator

Thank you. Anyone who wishes to ask a question may please press star one now. We have the next question from the line of Sailesh Raja from BNK Securities. Please go ahead.

Sailesh Raja
Analyst, BNK Securities

Particular pipe. So usually the water-based chemical-

Operator

Shailesh Raja

Sailesh Raja
Analyst, BNK Securities

Yeah.

Operator

Sorry to interrupt, can you please repeat the question?

Sailesh Raja
Analyst, BNK Securities

Yeah. Can you hear me?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes, we can.

Operator

Yes, we can hear you now.

Sailesh Raja
Analyst, BNK Securities

No, after three years, we started taking more water-based, chemical pipe orders. So of the total order book value of INR 3,200 crore, so currently, what is the contribution coming from water-based projects? And also, how is the margins in this particular project? Usually, the water-based chemical stock, margins are low, actually, because it will be a bare pipe and it will be sub-10% margin. Are you still confident of meeting, maintaining that, blended EBITDA of, 17%, sir, overall for the company?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Right now, our water order book would be close to INR 900 odd crore. This is spread over until the end of next financial year. Of course, the margins are little, not maybe close to 17%, but yes, on a blended level, we will still be able to maintain 15%-17%.

Sailesh Raja
Analyst, BNK Securities

Okay. So how is the working capital cycle here?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Working capital cycle is longer here because the contractor, the payment terms is 180 days from the date of billing.

Sailesh Raja
Analyst, BNK Securities

Okay, okay. Okay, fine. Okay, sir. So my second question, in Ravi Technoforge, any further CapEx you need to deposit to achieve that INR 500-600 crore turnover?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, for achieving INR 500 crore, no further CapEx is required, but beyond that, yes, we will have to have additional CapEx.

Sailesh Raja
Analyst, BNK Securities

Okay. Do we supply to all MNC companies, sir, like SKF, Schaeffler, Timken?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes, SKF, Schaeffler, Timken, NBC, NRB, Nachi.

Sailesh Raja
Analyst, BNK Securities

Okay.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

We are in talks with IXAR. So yes, all major, all top bearing manufacturers are the customers.

Sailesh Raja
Analyst, BNK Securities

Okay. Now, how much of revenue comes from these MNCs?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

... Like 75% comes from three or four top bearing manufacturers.

Sailesh Raja
Analyst, BNK Securities

Okay. So any plans to add more products, sir, in this company?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes. Work is in progress. We will, we will update once it is shaped up.

Sailesh Raja
Analyst, BNK Securities

Okay, sir. Thank you, sir.

Operator

Thank you. We have the next question from the line of Vikas Singh from Phillip Capital. Please go ahead.

Vikash Singh
VP, Phillip Capital

Good afternoon, sir.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Good afternoon.

Vikash Singh
VP, Phillip Capital

Sir, I just wanted to understand our bid book at this point of time, and if you could give us some color on our order book has been increasing much faster than PR. So going forward, what contributed to it, and how do you see this to move going forward?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Sorry... Can you repeat your question, please?

Vikash Singh
VP, Phillip Capital

So firstly, I wanted to understand your bid book at this point of time. And second, second question was that our order book execution has been faster than some of the peers. So just wanted to understand, is it because everybody got the same CS segment, I'm talking about, same kind of product. So what contributed to it? Are we taking a little bit of margin hit in order to execute more volumes, or things are different, if you could give us some insight into it?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

No, margin hit, we are not taking. We are trying to improve. There are some-

Operator

Sir, sorry to interrupt. Sir, on the management line, your voice is breaking. Can you please repeat the last line, what you were trying to say?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yes. What I meant to say is, there is no margin hit that is being taken. But we are trying to play on our strengths. Like we had one mill which could go to Odisha, right? But then we had opportunity in Rajasthan, and thereby, the freight which would have been cost for anybody else, has been converted partially into our margin.

Operator

Vikas Singh, any further questions?

Vikash Singh
VP, Phillip Capital

I have actually lost the last part of the conversation, actually. And the bid book is still pending, that's what kind of bid book we are holding right now in the Carbon Steel segment?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Oh, bid book. So bid book, I already clarified in the first question itself, that close to INR 3,000 crore are under bidding in the Water segment, INR 1,000 crore, INR 1,500 crore in Oil & Gas segment, domestic. And there are some international projects which are also under bidding.

Vikash Singh
VP, Phillip Capital

Understood, sir. Sir, one more thing regarding one of your international competitor, Tubacex, which has posted one of the best results since inception. So just wanted to understand, is it basically, is it a company specific phenomena, or globally, the demand has been now picking up pretty fast, and we would also eventually get benefit from it?

Operator

Sir, your voice is breaking.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Can you hear me?

Operator

Yes, we can hear you now.

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

So, for Stainless Steel, yes, there is—we, we are seeing increased demand, which is also reflected in the order book. So if you see, the order book is also at the highest level, close to INR 3,200 crore. And for the last five, six months, it has been over INR 3,000 crore, in spite of a lot of dispatches happening. So yes, the order inflow has increased.

Vikash Singh
VP, Phillip Capital

Thank you, sir. That does answer my question.

Operator

Thank you. Anyone who wishes to ask a question may please press star and one now. As that was the last question for today, I would now like to hand the conference over to Mr. Sahil Sanghvi for closing comments.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yeah, thank you, thank you all. We would like to thank the management for patiently answering all the questions, and also all the participants for joining the call. Manoj sir, would you like to give any closing comments?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Yeah, yeah, I would like to thank all the participants for attending the earnings call, and having the patience of hearing me out. Also,

Operator

Sir, I'm sorry to interrupt, sir, your voice is breaking. Can you please repeat the last line, what you said?

Manoj Sanghvi
Business Head, Ratnamani Metals & Tubes

Thank you for attending it, and I wanted to request the organizer that if we can have this call every six months, there is more value add which the investors will find. Otherwise, it is like repeating, because a lot of things don't change in three months, more or less. So it's better and more updates can be, that's what the management feels, but it can still be discussed. And any questions from the investors can always be entertained by email also. Thank you.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Thank you.

Operator

Thank you. On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.

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