Revenue drops 15.63% YoY, but operating margin rebounds QoQ
Lower other income kept net profit under pressure even as costs fell faster than revenue and the tax rate declined.
Filed 07 Aug 2026, 11:54 IST · Ratnamani Metals & Tubes Ltd (RATNAMANI)
Key takeaways
- Consolidated revenue declined 15.63% YoY as management said lower government infrastructure spending and Middle East-related disruption affected demand and project execution.
- Operating margin improved 2.53 percentage points QoQ because expenses fell 13.08%, faster than revenue's 10.43% decline.
- Net profit fell 7.66% QoQ despite a 2.64-percentage-point tax-rate reduction, as other income dropped 57.50% and contributed 12.8% of pre-tax profit.
Price around the results
Government-linked demand pulled down Q1 revenue
Ratnamani's consolidated revenue fell 15.63% YoY to Rs 971.63 cr, while operating profit declined 13.79% to Rs 162.20 cr. Management said lower government infrastructure spending, including in water projects, and Middle East geopolitical disruption affected demand, project execution and raw-material supplies. The company also said revenue was lower than in the corresponding quarter last year.
Cost control improved margins, but other income weakened profit quality
QoQ revenue fell 10.43%, but expenses fell 13.08%, lifting operating margin by 2.53 percentage points. Operating profit therefore rose 5.59% QoQ even as reported profit before tax fell 10.79%. Other income dropped 57.50% QoQ and accounted for 12.8% of pre-tax profit, while the tax rate fell 2.64 percentage points; the lower tax rate partly cushioned the decline in net profit.
Margin remains above peers after recovering from Q4
The 16.69% operating margin was 0.35 percentage points above Q1FY26 and 2.53 percentage points above Q4FY26. It remains below the 19.21% recorded in Q3FY26, so the latest quarter marks a rebound rather than a return to the recent peak. Ratnamani's margin was 2.41 percentage points above the 14.28% median among 70 Industrials peers that had reported the quarter.
New facilities and exports are management's offset
Management said exports grew and enquiries across key markets improved, while also citing the company's manufacturing capabilities, order pipeline and subsidiaries as support for its long-term growth prospects. The presentation said Ratnamani completed its Odisha external-coating facility and Kutch HSAW facility during the quarter; the Odisha plant has external 3LPE capacity of 2.5 million square metres per year. Management said RFSS expects expanded capacity to be ready by Q3 with commercial production from Q4, and reported an order book exceeding Rs 300 cr targeted for execution over the next nine months.
Past result reactions have usually been negative
Across eight prior result reactions, the stock fell six times, with a median absolute move of 1.91%. The current filing has no recorded market reaction yet, so its eventual move can be compared with a history that has been more often negative than positive.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹972 cr | ₹1,085 cr | -10.43% | -15.63% |
| Other income | ₹18 cr | ₹41 cr | -57.50% | -41.93% |
| Expenses | ₹809 cr | ₹931 cr | -13.08% | -15.99% |
| Operating profit | ₹162 cr | ₹154 cr | +5.59% | -13.79% |
| Operating margin (%) | 16.69% | 14.16% | — | — |
| Interest | ₹6 cr | ₹6 cr | -1.91% | -43.86% |
| Depreciation | ₹36 cr | ₹35 cr | +4.38% | +14.34% |
| Profit before tax | ₹137 cr | ₹154 cr | -10.79% | -21.83% |
| Tax | ₹30 cr | ₹38 cr | -20.33% | -37.55% |
| Net profit | ₹107 cr | ₹116 cr | -7.66% | -15.81% |
| EPS (₹) | ₹11.72 | ₹14.94 | -21.55% | -37.69% |
Operating margin of 16.69% compares with a Industrials sector median of 14.28% across 70 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company completed the external coating facility at Odisha and the HSAW manufacturing facility at Kutch during the quarter.
Guidance & outlook
- Exports grew encouragingly and enquiry levels across key markets continued to improve.
- The company remains confident of its long-term growth prospects, supported by manufacturing capabilities, its order pipeline and subsidiaries.
Expansion
- The Odisha greenfield coating plant has an external 3LPE capacity of 2.5 million square metres per year.
- RFSS expects its expanded capacity to be ready by Q3, with commercial production commencing in Q4.
- RTL recently completed its Pipaliya unit expansion, increasing capacity by 20%.
New orders
- RFSS held an order book exceeding ₹300 crore, targeted for execution over the next nine months.
New initiatives
- RTL's Pipaliya expansion included mechanisation and automation to improve efficiency and productivity.
- RTL commissioned a 9 MW solar power plant, with 50% of its energy requirement to be sourced from green energy.
Competition
- RTL supplies globally to 15 countries, with exports accounting for 40% of its portfolio.
Problems & risks
- The company faced lower government infrastructure spending and Middle East geopolitical impacts on demand, project execution and raw material supplies.
- Quarterly revenue was lower than in the corresponding period of the previous year.
What to watch
- Whether operating margin holds above 16.69% after the 2.53-percentage-point QoQ rebound.
- Whether revenue improves from Rs 971.63 cr as management's reported export growth and improving enquiries develop.
- RFSS's reported order book exceeding Rs 300 cr and management's stated nine-month execution window.