Rama Steel Tubes reports steady Q3FY25 growth amid market challenges

Rama Steel Tubes Limited (RSTL) has reported steady financial performance in Q3FY25, despite ongoing challenges in the steel tubes market and raw material price fluctuations. The company’s total revenue, including other income, reached INR 2,804.60 million, marking a 2.89% quarter-on-quarter increase. Sales volumes grew by 1.47%, with 51,669.01 metric tonnes sold in the quarter. The company also achieved a 4.24% increase in EBITDA, reflecting operational efficiency.

A standout performance metric was the 39.24% surge in net profit, which was driven by a significant reduction in finance costs. The company successfully lowered its borrowing expenses by 60%, reducing finance costs from INR 72.67 million to INR 28.72 million. This improvement was attributed to RSTL’s strategic shift to a cash-and-carry model, efficient fund utilisation, and favourable price negotiations with lenders.

What Strategic Expansions Did Rama Steel Tubes Limited Undertake?

To strengthen its position beyond the steel tubes market, Rama Steel Tubes Limited expanded into new high-growth sectors. The company incorporated a wholly owned subsidiary, Rama Defence Private Limited, which will operate in the defence equipment manufacturing industry. This new entity will focus on trading, importing, exporting, manufacturing, assembling, and supplying defence-related equipment, including arms, ammunition, and security hardware. This move aligns with the Indian government’s focus on domestic defence production and self-reliance in military equipment.

Additionally, Rama Steel Tubes Limited made a strategic investment in renewable energy by acquiring a 40% stake in Oram Green Energy Limited. This venture will focus on green and renewable energy solutions, positioning RSTL within the rapidly growing sustainable energy sector. The company’s move into renewable energy investment signals a shift toward long-term sustainability and business diversification.

Rama Steel Tubes Limited also strengthened its footprint in the coated steel industry by acquiring a 24.8% stake in Bigwin Buildsys Coated Private Limited. The investment, valued at INR 5.65 crore, will be funded through a preferential issue of shares, subject to shareholder and regulatory approvals. This acquisition will establish Bigwin Buildsys as an associate company of RSTL, further expanding its influence in value-added steel products.

How Has Market Volatility Impacted RSTL’s Revenue?

Despite the positive growth in sales volume, Rama Steel Tubes Limited faced challenges due to raw material price fluctuations, which led to a 21.70% year-on-year decline in revenue. Steel prices have remained volatile, impacting the overall valuation of sales. However, the company managed to mitigate some of these effects through cost-optimisation measures, improved efficiency, and a focus on high-value product segments.

RSTL’s sales volume continued to reflect strong demand in multiple sectors, with a 7% increase year-on-year. The company sold 139,956.23 metric tonnes in the first nine months of FY25, compared to 131,137.81 metric tonnes in the same period of FY24. The company’s ability to maintain volume growth amid price fluctuations highlights the resilience of its business model.

What Are RSTL’s Long-Term Growth Strategies?

RSTL’s growth strategy revolves around business diversification, product innovation, and geographic expansion. The company continues to invest in value-added steel products, ensuring it remains competitive in the steel tubes market. Its presence in over 16 countries, along with subsidiaries in the UAE and Nigeria, underscores its commitment to strengthening its global supply chain.

The company operates four state-of-the-art manufacturing facilities in Sahibabad (Uttar Pradesh), Khopoli (Maharashtra), and Anantapur (Andhra Pradesh), equipped with the latest technology and testing capabilities. These facilities allow RSTL to maintain strict quality control standards, positioning it as a trusted supplier in the steel industry.

RSTL’s expansion into defence equipment manufacturing and renewable energy investment marks a strategic shift toward industries with long-term growth potential. With government initiatives supporting defence production and clean energy, the company is well-positioned to leverage these opportunities for sustained growth.

What Does the Future Hold for RSTL?

RSTL’s ability to reduce financing costs, expand into new sectors, and sustain sales volume growth despite market volatility reflects a strong strategic foundation. The company’s focus on steel tubes, defence equipment manufacturing, and renewable energy investment ensures a well-balanced portfolio that mitigates risks associated with raw material price fluctuations.

The company’s leadership remains optimistic about its future, with Executive Director & CEO Richi Bansal highlighting RSTL’s commitment to cost efficiency, innovation, and global expansion. By leveraging its existing strengths while venturing into high-growth industries, Rama Steel Tubes Limited is positioning itself for long-term profitability and market leadership.