Sharekhan Research maintained buy rating on Ratnamani Metals and Tubes with target price of Rs 118.

According to the report, interested investors can buy the stock with a strict stop loss of Rs 65.

Shares of the company, on Monday (June 15), closed at Rs 76.10 on the Bombay Stock Exchange (BSE). The share price has seen a 52-week high of Rs 185 and a low of Rs 32 on BSE. Current EPS and P/E of the stock stood at 15.82 & 4.81 respectively.

“We have revised downwards our EPS estimates for FY2010 and FY2011to Rs 19.8 and Rs 23.7 mainly on account of (1) Lowering volume growth; (2) Lower realisations; and (3) A lower OPM. The business environment for RMTL is challenging given the slowing capital expenditure in oil & gas sector, the key user industry for the company’s products. However, the company also has specialty products in its portfolio of offering, which are consumed in high-growth sectors like power. We feel, RMTL should be able to report a CAGR of 14.3% and 10.5% in its revenues and profit respectively over FY2009-11E. The key risk to our call would be a significantly lower order inflow going forward. However, at the current market price the stock is trading at an attractive valuation of 3.3x its FY2011 earnings. We maintain Buy rating on the stock with a price target of Rs 118 (5x FY2011E), said Sharekhan Research report.

At its meeting held on June 11th 2009, Ratnamani Metals & Tubes Limited has declared that the company’s directors recommended to maintain the dividend at INR 1.40 per equity share and also recommended a special 25th Anniversary Silver Jubilee dividend of INR 0.40 per equity share, thus making total dividend at INR 1.80 per equity share of INR 2 each subject to approval of the shareholders in Annual General Meeting.

In just two decade, Ratnamani has grown to develop into a multi-product, multi location public limited company offering total piping solutions to a wide choice of industries.

The company’s manufacturing plants employ high-tech technology to make a broad variety of Stainless Steel Welded / Seamless Tubes & Pipes and Carbon Steel Welded Pipes.

The company caters to the niche markets of almost all the rising segments including oil and gas, refineries, petrochemicals, process industries, power plants and water distribution.