Whalesbook
Ratnaveer Precision Engineering Eyes ₹2500 Crore Revenue with New CCL Venture
Ratnaveer Precision Engineering is targeting a consolidated top line of ₹2500 crores within the next three years. This ambitious goal will be fueled by continued growth in its established stainless steel business, projected to reach ₹1800 crores, and the strategic entry into the Copper Clad Laminates (CCL) sector, expected to contribute ₹750 crores.
What's Happening
Ratnaveer Precision Engineering detailed its growth strategy during a recent earnings call. The company plans for its new CCL project to begin production by November 2026. This expansion, along with growth in its stainless steel product lines, underpins its revenue targets.
Why It Matters
The company's move into the CCL market, crucial for electronics, represents a diversification effort. Successful execution could significantly boost Ratnaveer's revenue and market position, potentially reducing India's dependence on imported CCL. The projected consolidated EBITDA margin of 13-14%, with the CCL segment aiming for 20% EBITDA and 13% PAT, highlights the venture's profit potential.
Company Background
Founded in 2002, Ratnaveer Precision Engineering is a major Indian producer of stainless steel washers, fasteners, and sheet metal components. The company serves sectors like railways, automotive, and defense. It has shown strong financial performance, with a CAGR of over 25% in revenue, EBITDA, and PAT over the last three years. Ratnaveer is also considering acquiring a European firm.
Key Developments
The company is progressing with its 'Capex 1', 'Capex 2', and 'Capex 2A' projects. The CCL project, which involves a technological partnership with a Chinese company, is a major new initiative. Ratnaveer is investing approximately ₹351 crores in the CCL project and ₹46 crores for solar power installations. The company also plans further fundraising, including a QIP of ₹330 crores and promoter infusion of ₹120 crores via warrants.
Potential Risks
Risks to watch include the execution timeline for the CCL project, dependent on machinery delivery and potential weather impacts. A noticeable increase in trade receivables also points to potential working capital management challenges. Dependence on imported raw materials for PCB manufacturers and foreign exchange risks are also considerations.
What to Watch Next
Investors will focus on the CCL project's progress, especially machinery installation and production start dates. Managing trade receivables and overall working capital efficiency will be critical. Updates on the potential European acquisition and the success of planned fundraising efforts will also be important indicators.