Growth with Profitability are two very prime combination required by any investor before even looking into a company for investment purpose. And with this mind-set, we have to select the best company which possesses both the above combination of growth and profit. Therefore, in our Conclusion of Industry Analysis, we short listed two best companies i.e. APL Apollo and Ratnamani Metals which possesses both the combinations.

Both the companies are excellent in terms of Growth in Profits and Growth in Revenues along with other financial parameters. However, I found Ratnamani Metals & Tubes Limited grading higher then APL Apollo on various other non-financial parameters as well. This is the main reason for selecting RMTL, we could observe all the matrix in the earlier blog of Industry Analysis & Master Sheet.

For a quick recap: RMTL’s 10 year long history shows healthy growth in revenue at CAGR of 13.5 % and healthy growth in profits at CAGR of 15 % showing the company have constantly improved the margins. The company has consistently increased shareholder’s wealth over the years and maintained (sustainable) ROE in excess of 15%. Not only that, in spite industry facing cyclicality phases in its 9 year period from 2011 to 2020, it is able to achieve 9 year average Economic Profitability of 5.20%. The company, most of the time have been net debt-free coupled with comfortable liquidity position. Also, Gross Profit Margins and EBITDA Margins for RMTL is very high when compared to its peers. The higher GP & EBITDA Margins is due to RMTL’s products mix, being catered to niche markets as well. “Porters Five Force” is favourable to companies continued profitability for long term.

Hence, as understood from Industry Analysis & Master Sheet, when we look at all the parameters in context, the prospect of RMTL going ahead looks very promising. Hence, the choice of selecting RMTL for our future in-depth analysis seems absolutely perfect.

Thank You!!

Disclaimer: Views are personal and presented through independent research. By no means there is any stock advice. Also, presented content is for learning purpose only. I might be wrong in presenting data and inaccurate data, let me know if you find any discrepancies.