Ratnamani's Q2 margin falls as expenses outpace revenue
Revenue grew +13.08% YoY, but faster expense growth, higher interest and a higher tax rate pulled net profit down -14.55%.
Filed 06 Nov 2026, 13:10 IST · Ratnamani Metals & Tubes Ltd (RATNAMANI)
Key takeaways
- Consolidated revenue rose +13.08% YoY, but operating profit fell -10.60% as costs grew faster.
- Operating margin narrowed 3.72 percentage points YoY to 14.01%, extending the deterioration after the Q3FY26 peak of 19.21%.
- Other income contributed 17.85% of pre-tax profit, while the tax rate rose 1.53 percentage points YoY to 23.29%.
Price around the results
Revenue growth did not translate into profit growth
Ratnamani Metals & Tubes reported consolidated revenue growth of +13.08% YoY, but operating profit declined -10.60% and net profit fell -14.55%. Sequentially, revenue rose +38.69% and net profit increased +24.58%, showing a sharp recovery from Q1FY27 despite the weaker year-on-year comparison.
Costs and financing pressure narrowed the margin
Year-on-year expenses grew +18.18%, faster than revenue at +13.08%, reducing operating margin by 3.72 percentage points. Interest expense rose +35.08%, adding to the pressure, while the tax rate increased 1.53 percentage points to 23.29%. Other income accounted for 17.85% of pre-tax profit, so reported earnings included a material non-operating contribution.
Margin remains above peers but below recent highs
The 14.01% operating margin was below 16.69% in Q1FY27 and 14.16% in Q4FY26, after reaching 19.21% in Q3FY26; the sequential decline was 2.68 percentage points. Ratnamani remained 2.51 percentage points above the 11.50% median among 197 Industrials peers that had reported the same quarter.
Expansion adds capacity while new orders build visibility
Management said induction bend production is scheduled to start from Q3FY27, with the remaining equipment expected over the following two quarters. The company said its Jayva greenfield project was 60% complete and targeted for commissioning in FY27, while Spiral Mill-3 was upgraded to make pipes up to 18 metres long and an external 3LPE coating plant was commissioned in Odisha. Management also said RFSS received a Rs 2,700 cr export order, taking its order book above Rs 3,000 cr.
No current market reaction; past moves leaned negative
There is no post-results price reaction yet to assess. After the previous eight results, the stock rose three times and fell five times, with a median absolute move of 1.91%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,348 cr | ₹972 cr | +38.69% | +13.08% |
| Other income | ₹31 cr | ₹18 cr | +76.35% | +15.27% |
| Expenses | ₹1,159 cr | ₹809 cr | +43.15% | +18.18% |
| Operating profit | ₹189 cr | ₹162 cr | +16.42% | -10.60% |
| Operating margin (%) | 14.01% | 16.69% | — | — |
| Interest | ₹9 cr | ₹6 cr | +46.03% | +35.08% |
| Depreciation | ₹37 cr | ₹36 cr | +2.24% | +15.58% |
| Profit before tax | ₹174 cr | ₹137 cr | +26.50% | -12.85% |
| Tax | ₹40 cr | ₹30 cr | +33.25% | -6.73% |
| Net profit | ₹133 cr | ₹107 cr | +24.58% | -14.55% |
| EPS (₹) | ₹14.49 | ₹11.72 | +23.63% | -25.42% |
Operating margin of 14.01% compares with a Industrials sector median of 11.50% across 197 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Spiral Mill-3 was upgraded during the quarter to manufacture pipes up to 18 metres long.
- The external 3LPE coating plant in Odisha was commissioned during the quarter.
Guidance & outlook
- Induction bend production is scheduled to start from Q3 2026-27, with the remaining equipment expected over the next two quarters.
- The Jayva greenfield project is targeted for commissioning in 2026-27.
Expansion
- Spiral Mill-3 in Kutch was upgraded to manufacture pipes up to 18 metres long, with annual capacity of 1 lakh MT.
- An external 3LPE coating plant was commissioned in Odisha with annual capacity of 25 lakh square metres.
- The Jayva greenfield project includes an automatic hot former for high-volume mid-sized bearings and is 60% complete.
- RFSS has partly commissioned its expansion project, with post-expansion annual capacity planned at 7,000 MT.
- RFSS plans post-expansion annual capacity of 7,000 MT, including 4,000 MT of pipe spools and 2,500 MT of induction bends.
New orders
- RFSS received an export order worth ₹2,700 Crores, taking its order book above ₹3,000 Crores.
New products
- RTL successfully developed hubs for third-generation wheel bearings used in EVs and the latest passenger vehicles.
New initiatives
- The company received approval to supply stainless steel seamless U-tubes for carbamate condensers from a global technology licensor.
- RTL commissioned 11 MW of solar power plants, bringing approximately 50% of its energy needs from green energy.
- RTL developed hubs for third-generation wheel bearings used in EVs and the latest passenger vehicles.
What to watch
- Whether operating margin recovers from 14.01% after 16.69% in Q1FY27.
- Whether expense growth continues to exceed revenue growth after +18.18% versus +13.08% YoY.
- Progress on induction bend production scheduled to start from Q3FY27 and the RFSS order book above Rs 3,000 cr.