Rama Steel Tubes Ltd’s Khopoli Plant to Double Its Manufacturing Capacity

Rama Steel Tubes Ltd. (RSTL), (BSE: 539309; NSE: RAMASTEEL), the leading manufacturer of steel pipes , tubes, Hollow Sections  and G.I. pipes in India has started implementation of its expansion project at Khopoli, Maharashtra. This entails doubling its capacity to manufacture M.S. tubes from 36,000 MT per annum to 72,000 MT per annum. The Khopoli Plant which is the company’s latest addition to its two existing plants at Sahibabad near Delhi enjoys the economic advantage of low transportation cost benefiting exports as well as distribution in the western and southern pipe markets in India. This strategic combination of location advantage and increased output is expected to provide an ROI of more than 30 per cent to the company.

Rama Steel Tubes Ltd is listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) with current market capitalization of Rs. 130 crores.

“Adding the plant at Khopoli was a decision based on anticipated benefits for the growth and profitability of the company. Our exports already constitute 30-35 per cent of our turnover and markets around Mumbai and South India have tremendous demand for Hollow Sections and Tubes,” says Mr. Richi Bansal, Executive Director, Rama Steel Tubes Ltd.

Rama Steel Tubes Ltd’s Khopoli plant came into commercial production in June 2015 and has a total installed capacity of 36,000 MT. The company has acquired 20 acres of land at Khopoli with a capacity to manufacture around 36,000 MT Pipes, Tubes, and Hollow sections per annum. With productivity at 72,000 MT the plant is expected to impact the top line and bottom line of the company.

Rama Steel Tubes Ltd reported gross sales of Rs.49 crores, EBITDA of Rs.2.14 crores and PAT of Rs.0.48 crores in Q1 FY 2015. Despite poor demand in construction and weak global economy and falling steel prices in the previous year, the company registered profits of 0.68Cr in FY 2014-15 and 2.1Cr in FY 2013-14. RSTL has a track record for consistently being a profit making company.