Buy Rama Steel Tubes; target of Rs 235: Joindre Capital Services
Joindre Capital Services’s research report on Rama Steel Tubes
Incorporated in 1974, Rama Steel Tubes Ltd. (Rama Steel), is one of the major player in the steel pipe tube in India. Having started with around 10,000 tonnes capacity at single location, today RSTL has a presence in three locations with total capacity of 1.32 lac tonnes annually. RSTL is primarily engaged into the manufacturing of ERW black round pipes, galvanized pipes, pre-galvanized pipes, steel sheets and structures. It products are sold under the brand name “TTT Rama”.
Hence we believe that at the current price of 181 the RSTL stock looks undervalued at a PE of 12x and 8x based of FY19E and FY20E and should be purchased at the current price for a price target of around Rs 235 over the next 12 to 15 months.
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