Bullish Bet: ICICI Direct Sets ₹475 Target Price for Ratnaveer Precision Engineering
ICICI Direct issues a Buy rating for Ratnaveer Precision Engineering, projecting massive revenue and PAT growth by FY28.
In a significant move for investors tracking the precision engineering sector, ICICI Direct Research has issued a Buy rating for Ratnaveer Precision Engineering Limited. The brokerage has set an ambitious Ratnaveer Precision Engineering target price of ₹475 per share, signaling strong confidence in the company's growth trajectory over the next few years.
This valuation is based on a multiple of 24x applied to the estimated earnings per share (EPS) for the financial year 2028 (FY28). The brokerage anticipates a period of aggressive expansion, projecting that the company's revenue and Profit After Tax (PAT) will grow at Compound Annual Growth Rates (CAGRs) of 39.2% and 60.6%, respectively, between FY26 and FY28.
The Road to FY28: Financial Projections
ICICI Direct expects Ratnaveer to witness a steep climb in its financial metrics. The brokerage has outlined a clear path of growth for the coming years:
- Revenue: Projected to rise from ₹1,069 crore in FY26 to ₹1,365 crore in FY27, eventually hitting ₹2,072 crore by FY28.
- EBITDA: Expected to jump from ₹112 crore in FY26 to ₹143 crore in FY27, and then surge to ₹278 crore in FY28.
- Profit After Tax (PAT): Estimated to grow from ₹64 crore in FY26 to ₹77 crore in FY27, reaching ₹166 crore by FY28.
Profitability is also expected to sharpen. The EBITDA margin is projected to improve from 10.5% in FY26 to 13.4% by FY28, with the diluted EPS estimated to reach ₹19.7 in the final year of the projection.
Fueling the Growth: Stainless Steel and the CCL Leap
The optimistic outlook is not based on speculation alone but on two primary growth engines: the expansion of the core business and a strategic foray into new technology.
Core Business Expansion
Ratnaveer aims to scale its existing stainless-steel business significantly. The company targets revenue growth from ₹1,080 crore in FY26 to ₹1,350 crore in FY27 and further to ₹1,800 crore by FY28. To support this, a Phase-II capital expenditure of approximately ₹58 crore is being deployed across several segments, including clips, sheet-metal components, tubes, pipes, and fasteners.
The Copper Clad Laminate (CCL) Opportunity
Perhaps the most exciting catalyst is the ₹338 crore investment in an ECMS-approved FR-4 Copper Clad Laminate (CCL) facility. This project is a strategic move to capture a market where over 90% of India's requirements are currently met through imports.
The facility will feature five production lines with a total annual capacity of 79.2 lakh sheets. Current updates indicate that civil construction is roughly 75% complete, with trial production slated for December 2026. The first line is expected to reach 85% utilization by April 2027, with the first phase alone potentially contributing ₹108 crore in revenue and ₹22 crore in EBITDA.
Recent Performance and Potential Risks
The growth story is already reflecting in the numbers. In Q2 FY27, Ratnaveer reported a revenue of ₹387 crore, marking a 35.5% year-on-year increase. During the same period, EBITDA rose by 28.4% to ₹36.5 crore, while PAT saw a massive jump of 54.7%, reaching ₹24.1 crore.
However, the brokerage also cautioned investors about certain headwinds. The primary risks identified include a potential slowdown in industrial capital expenditure and the challenges associated with high working-capital requirements, which could impact the projected outlook.