Business Desk – Metal Stock Rally: Shares of metal sector company Ratnamani Metals and Tubes rose for the second consecutive trading session on Tuesday. Buying in shares increased after the news of the company's subsidiary getting export orders worth about Rs 2,700 crore. The stock rose as much as 5.45% to an intraday high of Rs 2,843.90 on Tuesday.
However, profit booking was also seen at upper levels and during trading the stock was seen trading around Rs 2,700 with a gain of about 1%. Earlier on Monday also the stock had seen a strong rise of about 18%.
Shares rose almost 21% in 2 days
Including the rise of Monday and Tuesday, the shares of Ratnamani Metals have jumped by about 21%. Even before the news of the order came out on Monday, the stock was trading up about 6%. After the order information came out, buying intensified and the stock rose by about 18% intraday. Even after Tuesday's rise, profit booking was seen from investors at the upper levels. That means, along with the rise in shares, some investors also booked profits.
Subsidiary gets export order worth Rs 2,700 crore
Ratnamani Metals and Tubes informed the Stock Exchange that its subsidiary Ratnamani Finow Spooling Solutions Private Limited has received export orders worth about Rs 2,700 crore from international customers.
According to the company, these orders are to be completed in the next 2 to 3 years. This news has become a major reason for the rapid buying of shares. Large long-term orders are expected to support the company's business and revenue visibility.
How will the company fulfill the order?
According to the company, a part of the order will be manufactured in the subsidiary's own manufacturing plant. The remaining orders will be fulfilled through Subcontracting and Mercantile Trading Transactions.
That means the company will complete the orders with the help of external partners along with its existing manufacturing setup. The company said that this order has been received under its normal business operations. The company hopes that this big order will strengthen the export business of the subsidiary and the visibility of revenue will improve in the coming years. This order can support the business for the next 2 to 3 years.
Shares rose more than 19% in a week
Shares of Ratnamani Metals and Tubes have registered a growth of about 19.06% in the last one week. On Tuesday, the stock rose as much as 5.45% to hit an intraday high of Rs 2,843.90. Amidst the rise, the market cap of the company stood at around Rs 19,331 crore. However, after the rise in the stock, profit booking was also seen at upper levels.
Who has how much stake in the company?
According to the June quarter shareholding pattern, FII stake in Ratnamani Metals and Tubes has increased to 10.7%. It was 10.6% in the March quarter. DII's stake in the company is 19.2%. The largest stake is held by the promoters, who hold about 59.8% shares of the company. The general public i.e. public shareholding is about 10.4%.
Why is the order important for investors?
Export order worth Rs 2,700 crore is a big business opportunity for the company's subsidiary. It is to be completed in the next 2 to 3 years, so it is expected to improve revenue visibility in the coming time. However, the stock has gained about 21% in two trading sessions. In such a situation, instead of taking decisions only on the basis of Order News, investors should also look at the company's Financial Results, Valuation, Order Execution and further Earnings Growth.