BWR has assigned a long term rating of BWR BBB- [stable) and short term rating of BWR A3 to bank loan facilities of Rama Steel Tubes Ltd (RSTL).
The rating factors in the experience of the promoter in business along with the company's established track record of operations, diversified product portfolio and geographical presence, funding support from the promoters and moderate financial risk profile during FY20.
However, the rating is constrained by decline in profitability margins due to higher proportion of trading revenues, susceptibility to cyclicality and fluctuation in raw material prices and intense competition in the industry.
The outlook is stable as the company has been able to sustain the revenues from business operations in FY20 and H1FY21, and its ongoing capacity expansion to add new product range coupled with long standing relationships with customers and suppliers provide revenue visibility in the medium term.
BWR has principally relied upon the audited financial results of RSTL upto 31st March 2020, H1FY21 provisionals and projected financials FY21, FY22 and publicly available and information / clarifications provided by the company's management.
Shares of Rama Steel Tubes Ltd was last trading in BSE at Rs.48.5 as compared to the previous close of Rs. 47.75. The total number of shares traded during the day was 145 in over 6 trades.
The stock hit an intraday high of Rs. 48.5 and intraday low of 47. The net turnover during the day was Rs. 7018.