Ratnamani Metals & Tubes has received a long-term credit rating upgrade to CRISIL AA+/Stable, reflecting its strong financial discipline and diversified business growth. CRISIL noted the company's healthy cash position and a record order book of over Rs 4,900 crore, significantly boosted by high-margin pipe spooling projects for the nuclear sector. While revenue faced pressure from a cooling carbon steel market, the firm's operational efficiency continues to strengthen. Investors should watch for the execution of its upcoming Rs 1,200 crore expansion plans.
Ratnamani Metals & Tubes Receives Rating Upgrade to CRISIL AA+/Stable
CRISIL AA+/Stable (Long-Term) | Rs 4,900 Crore Order Book
Reader Takeaway: Strong order book and high-margin nuclear projects drive stability, though cyclical industry reliance remains a key pressure point.
What just happened
CRISIL Ratings has upgraded the long-term bank facilities of Ratnamani Metals & Tubes Ltd from 'CRISIL AA/Positive' to 'CRISIL AA+/Stable'. The short-term credit rating has been reaffirmed at 'CRISIL A1+'. The rating agency pointed to the company's improved business risk profile and consistent operational efficiency as primary drivers for the upgrade.
Why this matters
A 'CRISIL AA+' rating indicates a high degree of safety regarding the servicing of debt obligations. For shareholders, this reinforces the company’s strong financial health and conservative leverage. The upgrade is bolstered by a massive order book exceeding Rs 4,900 crore, ensuring strong revenue visibility for the near future.
The backstory
Despite a drop in consolidated revenue to Rs 4,498 crore in fiscal 2026 from Rs 5,186 crore in the previous year, the company managed to maintain resilient profits of Rs 534 crore. The dip in revenue was largely attributed to sluggish demand in the carbon steel segment. However, the company successfully offset this with a favorable product mix and a shift toward higher-margin stainless steel products.
Growth Drivers
The company is betting big on its high-value pipe spooling business, which makes up over 50% of its current order book. These nuclear power sector projects command margins exceeding 30%. To sustain this growth, management has earmarked Rs 1,200 crore for capital expenditure over the next three fiscals, which will be funded internally.
Risks to watch
Despite the positive outlook, the company’s business remains inherently cyclical, depending heavily on the health of the oil, gas, and infrastructure sectors. Additionally, the project-based nature of its work results in high working capital requirements, with gross current assets reported at 216 days as of March 2026.
Context metrics
The company maintains a robust interest coverage ratio of 27.6 times and a low gearing ratio of 0.07 times as of March 31, 2026. Liquidity remains strong, with cash and liquid investments totaling Rs 988 crore.