Ratnamani Q4 FY26: Lower volumes hit earnings, but margins hold up

Ratnamani Metals and Tubes ended Q4 FY26 with a sharp drop in revenue, reflecting muted demand and lower capacity utilisation. On a consolidated basis, revenue from operations fell to INR 1,084.82 crores in Q4 FY26 from INR 1,715.15 crores in Q4 FY25. EBITDA declined to INR 187.21 crores from INR 311.25 crores, and PAT fell to INR 115.91 crores from INR 203.16 crores.

Management attributed the quarterly weakness to lower sales volumes and under-absorption of fixed costs, especially against a high base of record sales in the same quarter last year. But the more important message in the presentation and the concall was that full-year profitability remained broadly stable, helped by subsidiaries.

FY26 profitability: subsidiaries helped offset a softer parent business

For the full year, consolidated revenue declined to INR 4,493.96 crores in FY26 from INR 5,186.47 crores in FY25. Yet consolidated EBITDA remained almost flat at INR 879.68 crores versus INR 883.14 crores, and EBITDA margin improved to 19.6% from 17.0%. PAT was also broadly steady at INR 534.47 crores compared with INR 541.57 crores.

The parent company’s standalone performance showed the underlying cycle more clearly. Standalone revenue dropped to INR 3,689.30 crores in FY26 from INR 4,876.14 crores in FY25. EBITDA reduced to INR 714.69 crores from INR 892.07 crores. Still, standalone EBITDA margin stayed at 19.4% and PAT margin at 11.8% for the year.

Management said stainless steel volumes improved in FY26 but prices were lower, keeping revenue broadly flat. The larger decline came from carbon steel volumes, where demand remained subdued and capacity utilisation was lower.

Order book, cash position, and near-term outlook

In the investor presentation, the company highlighted an order book of INR 1,800+ crores and reiterated that the standalone entity remains debt-free. In the earnings call, management provided an updated number. As of 1 May 2026, the standalone order book was stated at INR 2,162 crores, with INR 531 crores from stainless steel and INR 1,631 crores from carbon steel. The export component within this order book was stated at INR 697 crores.

Liquidity was positioned as a strength. The CFO said the company has close to INR 800 crores available as free cash. Any debt reflected in the balance sheet was described as linked to FD-OD facilities and minor utilisation rather than regular working capital borrowings.

The major uncertainty discussed in the call was geopolitical disruption in the Middle East. Management said this affected order booking, project execution and market sentiment, and also led to dispatch challenges. It stated that around INR 100 to 150 crores of material was ready but could not be shipped due to the conflict and shipping constraints.

Management gave a standalone revenue budget of INR 4,800 to 5,000 crores for the coming year, but it repeatedly linked this to an assumption that the situation normalises soon.

Expansion projects: longer pipes, coating capability, and subsidiary scale-up

Ratnamani’s capex narrative in FY26 is more about capability and positioning rather than a single large bet in India.

In carbon steel, the company disclosed development of a new HSAW spiral pipe facility at Kutch for producing pipes up to 18 metres in length with diameters from 18 inches to 143 inches and capacity of 100,000 MT. The projected timeline is June 2026, with equipment commissioning stated to be progressing.

It also highlighted that the CSAW plant expansion at Kutch has been completed. This expansion enables manufacture of high-thickness CSAW pipes up to 150 mm, 18 metres in length, and increases CSAW capacity from 48,000 MT to 75,000 MT, with maximum pipe diameter of 200 inches.

In Odisha, the company is adding coating capability to supplement its spiral welded pipes plant. The presentation stated that the internal coating plant is operational and the external 3LPE plant is under trial runs, with a May 2026 timeline.

Subsidiaries are also investing. RFSS is expanding spool manufacturing capacity at Kutch, and in its subsidiary overview it stated an expansion from 1,200 MT to 4,000 MT annually. It said this new capacity would be ready by Q3 of next year, with commercial production commencing from Q4. The ongoing project slide indicates a December 2026 timeline.

Ravi Technoforge is setting up a high-speed hot forming facility in Rajkot for Gen 3 hubs and other drivetrain components, with a projected timeline of December 2026.

Separately, the group has a greenfield project in Saudi Arabia through Ratnamani Middle East Company, LLC, for cold-finished stainless steel seamless products, with a projected timeline of March 2027. Management said design and engineering are complete and submitted for approvals, and the project could face a potential delay of up to three months if conditions do not normalise.

What to watch from here

Two themes dominated management commentary. The first was utilisation. The company’s Q4 numbers show how quickly profitability can be pressured when volumes fall and fixed costs are under-absorbed. The second was diversification. Management explicitly credited Ravi Technoforge and RFSS for supporting consolidated profitability in FY26, and described bearing rings and pipe spooling as key growth drivers.

RFSS appears to be moving from an initial ramp-up phase to a more order-backed execution cycle. Management stated spooling order book of around INR 550 crores and indicated a plan to execute around INR 480 to 500 crores this year. It also guided spooling growth at 20% to 25%, while noting that margins should trend to 20% to 25% over time.

For Ravi Technoforge, management guided 10% to 15% growth for the year and pointed to stronger growth potential next year as new capacity comes in.

Dividend was reduced to INR 10 per share (500%) for FY26, down from INR 14 per share in FY25, with management citing challenging times and conservation of resources.

Overall, Ratnamani exits FY26 with a softer revenue base but stable full-year profitability at the consolidated level, a sizeable order book, and multiple projects aimed at widening its product envelope. The company’s near-term delivery, including the guided standalone revenue range, appears closely tied to normalisation of shipping and project execution conditions in key export markets.