Ratnamani Metals & Tubes Limited (NSE: RATNAMANI) Q4 2025 Earnings Call dated May. 19, 2025
Corporate Participants:
Unidentified Speaker
Manoj Sanghvi — Chief Executive Officer
Prakash M. Sanghvi — Joint Managing Director
Analysts:
Unidentified Participant
Sahil Sanghvi — Analyst
Vikash Singh — Analyst
Radha Agarwalla — Analyst
Pranav Mehta — Analyst
Dhiraj Dave — Analyst
Parth Bhavsar — Analyst
Deepak — Analyst
Samyak Jain — Analyst
Ritesh Shah — Analyst
Presentation:
Manoj Sanghvi — Chief Executive Officer
Sam sa.
operator
Ladies and gentlemen, Good day and welcome to the Ratnamini Metals and Tubes Limited Q4 and FY25 earnings conference call hosted by Monarch Network Capital Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Sahil Sanghvi. Thank you. And over to you, sir.
Sahil Sanghvi — Analyst
Thank you, Saisha. Good evening to everyone. On behalf of Munark Network Capital, we welcome you all to the 4Q and FY25 earnings call of Rasamani Metals and Tubes. We are delighted to host the management of Rasamani. And from their side we have Mr. Manoj Sanghri, Chief Executive Officer and Mr. Viman Kattar, Chief Financial Officer. So without taking much time, I hand over the call to Mr. Manoj Sanghi for the opening remarks. Thank you. And over to you, Manoj sir. Yeah.
Manoj Sanghvi — Chief Executive Officer
Thank you. Thank you, Sahil. Good evening everyone. I welcome you all and thank you for joining us for the company’s performance update for the quarter four and the full financial year 2425. I am pleased to report that our performance for both Q4 and the full year has been strong. We recorded our highest ever sales during the quarter as well as for the entire fiscal year. On a standalone basis, our sales accounted for 1,575 crores for the quarter reflecting an increase of 11% over the same quarter last year. This Q4 growth was driven by an increased contribution from high value added products which also enhanced our profitability.
Throughout the first nine months, sales were relatively muted due to soft metal prices and delays in certain projects and customer offtake. However, the strong performance in Q4 helped us recover the decline experienced earlier resulting in an overall annual growth of 1% over the previous year. In spite of lower commodity prices and water application orders contributing higher to the carbon steel line pipe business where realizations are typically much lower compared to oil and gas application. With a greater focus on value added products and these contributing higher to the top line, we saw our gross profit and EBITDA margin improve by 3% and 2% respectively over the corresponding quarter last year.
On a full year basis, we maintained a healthy gross profit margin of 34% though our EBITDA declined marginally by 1%. Our financial position has also strengthened considerably this year. On a standalone basis, we generated 521 crores from operations and closed the year with zero debt. Considering the robust performance for the year the board has approved a dividend of Rupees fourteen per share that is seven hundred percent which is subject to approval of the agm. Now let me share some updates on the subsidiary performance. Ravi Technoforge Our ball bearing ring manufacturing business achieved sales growth of 12% in Q4 and and 11% for the full year.
We maintained profitability margins in line with previous year. Our expansion projects are progressing on schedule. Over the next two years we will enhance our capacity supported by increased automation and precision equipment. These upgrades will also help us step into new customer segments. Turning to Ratnamani Fino Spooling solutions, manufacturing spools and hangers and supports for nuclear power sector. Right now the business gained strong momentum and reported a turnover of 56 crores. Importantly, it now holds a robust order book exceeding 600 crores. To support this growth, we are setting up a new plant that will triple our production capacity.
Including the performance of our subsidiaries, we have achieved a consolidated turnover of 1,715 crores in quarter four and 5,186 crores for the full year which again is the highest ever sales on consolidated basis. We are also excited to announce our joint venture with SESCO in Saudi Arabia. The we are in the process of establishing a stainless steel manufacturing facility in the region. This strategic move will strengthen our local presence, enhance our brand visibility and allow us to better serve customers across Saudi Arabia and GCC region. With multiple expansion projects underway and positive industry outlook, we are confident in our ability to continue scaling our performance in the years to come.
That’s it from my end. Thank you and I’m happy to answer take questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vikas Singh from Philip Capital. Please go ahead.
Vikash Singh
Good afternoon sir and thank you for the opportunity. Sir, just wanted a little bit more color on order book which has declined sequentially. So can you just explain that it seems likely in India and while your commentary talks about the positive outlook. So what are the green shoots we are looking at? How should we look at our order book and the revenue growth guidance for FY26?
Manoj Sanghvi
So our order book as on 31st March was close to 2100 crores. Roughly 55 odd percent export and 45% domestic. At the moment as we speak a lot of jobs are under bidding both for stainless steel as well as carbon steel. And for the current year we can say that roughly 5 to 10% growth on volumes is what we can consider. Hello.
Vikash Singh
Hello sir. Am I audible?
Manoj Sanghvi
Yeah, yeah, yeah.
Vikash Singh
So sir, in terms of our Capex plan if you could give me a little bit more idea about what kind of expenditure we are going to incur geography wise and what kind of the capacity we are looking in order to enhance.
Manoj Sanghvi
So at the moment for Ratnamani we had two projects which are ongoing. One was a spiral welded plant in Orissa. Hello.
Vikash Singh
Yes please.
Manoj Sanghvi
Yeah. Wherein the phase one for the Orissa project is already commissioned and phase two will subsequently happen. So by by the end of this calendar calendar year phase two will also be into commercial production. And then we had the stainless steel cold finishing capacities that also the production has started. However the ramp up will take another three to six months. So this is for Ratnamani standalone basis. For our subsidiaries Ratnamani Fino we are increasing the capacity. So there by end of this calendar year or first quarter of the next calendar year we will have the expansion which is 250 odd crores in place.
So thereby increasing our capacity three folds. And for Ravi Technoforge we we are going to expand. We are increasing one automatic line. So there. There 18 months from now that will come into production.
Vikash Singh
And how much we are spending on these individual projects.
Manoj Sanghvi
So Orissa and stainless steel gold finishing facilities they are already. I would say commercial production has started. Phase one for Orissa and stainless steel cold finishing facilities is already started. And for RTL and Ratnamani we know between 200 to 250 crores each.
Vikash Singh
Understood. Over the next one and a half years.
Manoj Sanghvi
Yes. The Pino in next one year. Yeah, in next one year. And RTL in next 18 months.
Vikash Singh
Understood. And so just a little bit more color on the Saudi jv. What kind of capacity we are looking to set up there and how we are funding this in terms of JV. Our share of CapEx.
Manoj Sanghvi
Saudi joint venture is 7525 JV wherein Ratnamani holds 75% and we have a local partner who holds 25%. We are at the process of applying for company registration and processes. The funding shall be in the ratio of partnership. JV partnership. At the moment we have not decided whether it will be debt equity. So those structure and all going forward in. In this quarter we will finalize.
Vikash Singh
Notice. That’s all from my side. I’ll come in with you for further.
Manoj Sanghvi
Thank you.
operator
Thank you very much. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Radha from BNK securities. Please go ahead.
Radha Agarwalla
Hello sir. Thank you for the opportunity and congratulations for all time high performance. My first question was. Many chemistry players in India are talking about this high margin SS boiler tubes product for supply to thermal power plants. So I wanted to understand whether Ratnamani is supplying these tubes. And if yes then out of the total SS pipe order of 790 crores, how much is contribution from this boiler tube?
Manoj Sanghvi
We have some orders for the boiler tubes at the moment. However I don’t have the exact number. What is the quantum for boiler tubes? There are some in the bidding. And yes, we are one of the suppliers for boiler tubes for NTPC projects.
Radha Agarwalla
So secondly sir, how difficult is it to get the customer approvals in this product? And is this. Is it a fair understanding that these are. This is a new opportunity for the industry Considering earlier it was fully imported in India. And do you see this as a big opportunity going forward? What kind of margins can be made in this product?
Manoj Sanghvi
No. So this particular product boiler tubes earlier only extruded pipes were permitted. Currently NTPC as well as the power ministry has allowed the pierced product as acceptable for boiler tubes. So considering that the competitive scenario for this product has become intense. So yes, there. Since there is 80,000 megawatt to be implemented in the power sector the demand is going to be there. However, the competitive scenario for this particular product being peers product accepted by the government, we feel that the margins for the boiler products will not remain as it was in the past.
Radha Agarwalla
But still 17, 18 margins can be made in this similar to other HS products.
Manoj Sanghvi
Yes, possible.
Radha Agarwalla
Thank you. And secondly, with respect to the stainless steel I wanted to understand. So currently we have around 50,000 metric ton of capacity for stainless steel. So what would be the total power cost as per your assumption, if we utilize this stainless steel plant at full utilization and any rough idea of what kind of power units are required to run this plant at full utilization?
Manoj Sanghvi
I don’t have those figures offhand but if you want to send an email, I can look at it and then revert back.
Pranav Mehta
Okay.
Radha Agarwalla
Yeah. So in stainless steel pipes, like you rightly said, a lot of players are also adding capacity. So are you witnessing any pressure on margins because of this? And if yes, how are we planning to mitigate the risk?
Manoj Sanghvi
Not at the moment, but yes, going forward considering so many players coming in. And that too with the pierced product wherein we are not sure of the quality of the product. However, competitive scenario for stainless steel seamless pipes is increasing. We are planning to establish ourselves in grades which are not possible through pierced route. So that’s how we plan to save our margins.
Radha Agarwalla
A bit. A bit color on what kind of those grades would be and in which industries would that go to.
Manoj Sanghvi
Those information, those kind of information we would not like to diverge.
Radha Agarwalla
Okay, and so the capex plan that you have announced, how much do you plan to spend in FY26 and how much in FY27.
Manoj Sanghvi
Say for Saudi? About. So the total roadmap is that we should be we will be operational by December 2026. So 60 odd percent this year and 40 next year.
Radha Agarwalla
Okay, and your last question is in the MENYA region. So you’re setting up this SS5 facility. What are the key projects that are driving this demand and has there been any MOU signed with any customer regarding long term supply from this plant?
Manoj Sanghvi
No, there is no MoU with any of the customers. However we have at the moment we’ll be the only player who will have stainless steel cold finishing facilities in the region. And this product is being imported. So we are quite hopeful that we will be able to utilize the capacity is what we are planning.
Radha Agarwalla
Currently out of the 50% exports of stainless steel, how much are we supplying to MENA?
Manoj Sanghvi
All products put together of the 50%, I think substantial portion is for Middle East. 25 to 30%.
Radha Agarwalla
Okay, so if we set up a plant and start supplying from there. So is it fair to assume that the logistics cost would improve substantially and that would that could drive the margins from the MENA region to above 18% at Optimum?
Manoj Sanghvi
No, when I say 25 to 30% is exports, it is the whole product portfolio that we have. And what we are setting up in MENA is only stainless steel cold finishing tube making facility where the freight cost is not a big element. Thank you.
operator
Thank you very much. Before we take the next question, we would like to remind participants that you may press Star in one to ask a question. The next question is from the line of Pranav Mehta from Equius Securities. Please go ahead.
Pranav Mehta
Yeah, thank you for taking a question, sir. I wanted to understand on how soon are you expecting the domestic market to start seeing the order inflows coming in and how is the order inflow coming from let’s say apart from mena, your EU and US markets as well. If you can throw some light. Where. Where are we seeing the next leg of orders coming from?
Manoj Sanghvi
So domestic as such, if we see stainless steel and the carbon steel process pipe product where there is no problem with the demand, the demand especially for line pipes is quite muted. And that too for the oil and gas segment, water segment we are seeing some demand in Gujarat, Rajasthan, Maharashtra, Madhya Pradesh. But for oil and gas line pipes the demand is quite muted at the moment. And to answer your second question, both Middle east as well as us US for LNG projects for stainless steel, we are, we are seeing quite a healthy order inflow as well as in the MENA region.
Because a lot of oil and gas projects are going on in Abu Dhabi as well as Saudi and Qatar. Okay, sir.
Pranav Mehta
And sir, what about eu?
Manoj Sanghvi
EU is slow at the moment. However for stainless steel we still manage to have the same order inflow.
Pranav Mehta
Okay. Okay. So sir, it’s safe to assume that.
Manoj Sanghvi
You’Ll see start seeing the bulk of.
Pranav Mehta
The order inflow coming in from second half of FY26. Or.
Pranav Mehta
Is it the right way to look at it?
Manoj Sanghvi
Yes. If you see currently our order book is close to 2100 odd crores which is good for say 4 to 5 months. So by that time there are certain projects already in the bidding and we will see. And normally during the monsoon most of the water projects are bidding and post monsoon the execution happens. So yes, from the middle of second quarter we will see the uptake in line pipe segment at least.
Pranav Mehta
Okay, that’s it for my.
Manoj Sanghvi
Sir. Thank you. Thank you.
operator
Thank you very much. The next question is from the line of Sahil Sangvi from Monarch Net Worth Capital Ltd. Please go ahead, sir.
Sahil Sanghvi
Sir, congratulations for amazing last quarter and also a very good margin. My first question was just to clarify, sir. 25 to 30% when you said from Mena region, is that 25% of your total exports or your total revenue?
Manoj Sanghvi
Exact number style I would not have. It is a rough estimate that of the 50%, say approximately one third would be MENA region.
Sahil Sanghvi
Okay. Okay, got it, sir. And what will be the European US exposure?
Manoj Sanghvi
US would be 15 to 20% and similar would be Europe.
Sahil Sanghvi
Okay. Okay. And would you be able to give the absolute like total Capex number that you target to spend say in FY26 and 27.
Manoj Sanghvi
Including the subsidiaries or just. Yes, yes, but subsidiaries we will have a different percentage, right? Depending on the holding. So. So that number I. I have we still haven’t worked out. But. But for Standalone we have only one project of course phase two of Orissa and one this Saudi project. So 60% of the total apex land for Saudi we plan to spend.
Sahil Sanghvi
And what will be pending for the Odisha one.
Manoj Sanghvi
Orissa pays to about. About 4050 odd crores. Okay.
Sahil Sanghvi
Okay. Thirdly sir, if you can throw some light on Ravi Technoforge. I mean on the margin front we were quite flattish. So what are the. What are the obstacles over there? And how do you see only the levers for margin expansion at Ravi going ahead? Also on the demand side how do you see that.
Manoj Sanghvi
No demand this year. We are quite optimistic for Ravi. We have a sales plan of almost 350 plus crores for this year. So with all the fixed cost and more or less whatever automation and all we have done remaining same. We feel that the margins should be closer to 14% at EBITDA levels.
Sahil Sanghvi
Right. And lastly on the schooling side there was some delay in the receivable. So are we fairly confident of you know executing in FY26.
Manoj Sanghvi
For RFSS? We have schooling. Yeah. We have plans that to 350 plus crores. So yes we are. We are quite hopeful that we will. We will achieve that number Orders are already in hand. Capacities are available for. For 350 plus crores.
Sahil Sanghvi
Okay. Okay fine. Thank you sir.
Manoj Sanghvi
Thank you.
operator
Thank you very much. The next question is from the line of. Of part Vasa from Investec. Please go ahead.
Manoj Sanghvi
Hello.
operator
Yes sir. So please go ahead.
Manoj Sanghvi
No, I am waiting for the question. You.
operator
Yeah, I’m asking Mr. Parthenon to go ahead. Seems like the line for Mr. Path has been disconnected. The next question is from the line of Dheeraj Dawe from Sanwaj Finance. Please go ahead.
Dhiraj Dave
Hello. Can you hear me?
operator
Yeah, you’re audible.
Dhiraj Dave
Yeah. Thanks a lot and congratulations on good set of number. My one question on Consolidated financial. When we look into segment wide result we see a good amount of volatility in pipe spools and auxiliary support. And so for December quarter 24 the Celsius appears at 74 lakh and segment result shows profit of 5 crore. So is some typo or something?
Manoj Sanghvi
No, there is no I
Prakash M. Sanghvi
I if you don’t mind. I, I like see busy. Basically in case of fino that last year was the first year of full operations and lot of lot of inventory means stock was lying on the shop floor in various stages of production. So the expenses were loaded on that WIP which resulted into profit turnover being low then also. Yeah. So it will, it will. It will equalize over A period of time. Because in current financial we are expecting it should give a turnover of anything above 300 to 350cr. So then things will be normal. Because capacities and everything was created and dispatches were on the lower side.
Pranav Mehta
Yeah. Okay. And how do you see basically say three five years down the line. We started with stainless steel and then we went into ancillary supporting segments and we announced. And now we are trying to develop two new segments with bearing greens and sports and also internationally we are going ahead. So how do you see basically what is the management thought about? Where do you see your business going particularly segment wise? What is the potential, if I may put the question particularly for the new products or equation which we have done for very techno forge and kind of it.
What is aspiration? If everything goes well, what we aspire to be after three years, what can be the big sales? One can assume each,
Manoj Sanghvi
We will break down each. So for example, say we say see Ratnamani as a standalone basis. We have two expansions, Orissa and Saudi which will bring in the additional revenue. Plus 1200 tons of cold finishing capacity expansion what we have done in the existing plant. So all these put together and plus some capacity expansion in the welded segment we will be able to achieve a growth of say 10% year on year until unless we plan something bigger. And then for RTL we have already told you that this year we have plans of 350 crores plus that is what the visibility is.
And for Ratmani Fino spooling solutions there this year again 350. And with the expansion in place we will have the capacity to do anywhere between 600 to 650 crores in next two to three years.
Dhiraj Dave
And so how do you see basically competition intensity? So because we have wonderful years with on top line and we did a record breaking record sales force. But we do not see margins are moving. So is there any products? This is broadly. Is it because of production? Because we see that raw material price also declined metal price. Because in your opening remark you did say that metal price was soft visavi last year. Then despite that we achieve a phenomenal revenue. But when we look at bottom line, we do not find that corresponding operating leverage and kind of it which should have translated.
So is it that the product mix was more in favor of low margin and that’s resulted a kind of no.
Manoj Sanghvi
If we see the last quarter the margins were quite good. So margin is actually I would also talk about carbon steel, stainless steel put together. So quarter on quarter for us to compare. Maybe one quarter is close to 16.
Dhiraj Dave
Yeah. So let me rephrase the question. If I look at say FY24 consolidated number. I’m just looking at PBT. So that is simple. We have 827 crore kind of profit and which has declined to 340 crore approximately during this year FY25. So while we sales has increased, volume has increased and despite that we see profit declining in 12 months period. So if I just take FY24 as well as an FY25 if I need to understand the numbers what were contributing the pressure on margin despite a good amount of operating leverage.
Manoj Sanghvi
No. So one major shift between 24 and 25 is majority of the orders in 24 were for the oil and gas segment in line pipes, which is 25. Yeah. It was say 50% of line by business was from water. That is one major say event another that until and unless you grow at about 5% of course your costs keep on increasing. Right. So. So that. And. And the product mix as a whole because oil and gas if it is muted, it is muted. For of course for line types the volumes is quite high. But even for stainless steel and even for carbon steel other products overall.
And then we have some competition intensity in other stainless steel products also.
Dhiraj Dave
Okay, so all those factors. Just one more if I may squeeze out in oil and gas sector. Basically how do we means how much is the sales in India and how much is export? If you can just give us a broad idea and which actually segments slow down during FY25.
Manoj Sanghvi
Currently I do not have the breakup of what is the oil and gas in India. But roughly say out of 2,100 crores, whatever outside India is mostly mostly for oil and gas.
Dhiraj Dave
Okay. And that you expect you see green shoe of improvement there or it’s still lackluster on export.
Manoj Sanghvi
No, the. The current order book we have. We have good amount of exports order. Actually the domestic order book is muted but. But however the export order book is quite strong considering the demand from Middle East, US and the Europe.
Dhiraj Dave
Thanks a lot for giving me opportunity and wish you all the luck. I again connect next year with the record performance on both.
Manoj Sanghvi
Yes, yes, thank you.
operator
Thank you very much. The next question is from the line of paper from Investec. Please go ahead.
Parth Bhavsar
Yeah. Hi sir. So thank you for the opportunity. Sir. I have a few bookkeeping questions in terms of you know, utilization for stainless steel pipes and tubes and carbon steel pipes and tubes for the year FY25. What was the utilization? Oh, the utilization.
Manoj Sanghvi
So on an average Say stainless steel about 60%. Okay. And carbon steel for carbon steel spiral and ERW 55% and also close to 50%. Okay.
Parth Bhavsar
This is for FY25, right? Yes, perfect answer. Wanted to know that this 21 crores of order book that we have that is executable in how many like months or years?
Manoj Sanghvi
It can be executed in four to five months. However, some, some delivery would be delayed, so. Delayed meaning that the agreed delivery between the customer and us would be for a longer period.
Parth Bhavsar
Okay, okay, fair enough. And sir, I wanted to understand that your working capital cycle in FY25 went up like, like it went up over FY24. And this was largely mainly I believe because of the inventory that was built up for, you know, for spooling business. So how do you see this, do you see this normalizing in FY26 and, and by how many days? I think it, the cash conversion cycle is 163 days for FY25. So how do you see this improving in FY26?
Manoj Sanghvi
So working capital cycle may be because of the product mix. As I informed earlier on the call that a lot of orders from the water sector were executed where normally the working capital cycle is a little higher than the other products.
Parth Bhavsar
Okay, so sir, like roughly in our revenue mix, what would be the share of water, like our revenues from water.
Manoj Sanghvi
Segment of the total revenue?
Parth Bhavsar
Yes, yes. Of the total revenue.
Manoj Sanghvi
Roughly between 15, 15 to 18 odd percent.
Parth Bhavsar
So how much was this earlier roughly in FY24 or even like the last five year average or something like that. Just to understand like how much was.
Manoj Sanghvi
24 was not much. A lot of it was for oil and gas. Maybe it would be 5, 7%.
Parth Bhavsar
And so like any, you know, like where do you see, you know, in over the next two, three years, where do you see, you know which sector do you see that there would be some green shoots and we would be able to achieve good 10, 15% volume growth on all of our products. Is there a specific sector that you can see would come up?
Manoj Sanghvi
No specific, no particular sector. But yes, for the oil and gas like petrochemical plants, refineries, that is one sector which India is planning, maybe two Greenfield refinery which might come and then there is a lot of petrochemical plants coming in and the expansion plus the lng. So oil and gas is a sector which we see going forward which will again give, give that push.
Parth Bhavsar
All right, thank you sir. Those are my questions.
Manoj Sanghvi
Thank you.
operator
Thank you very much. Participants who wish to ask a question may press star in one at this.
operator
Time.
operator
As there are no further questions from the participants I now hand the conference over to Sahil. Sorry to interrupt but the next question is from the line off Raja from BNK securities. Please go ahead.
Radha Agarwalla
Hi sir. Thank you again for the opportunity. I wanted to understand what would be the non oil and gas mix for the SS5 division of the order book currently and in terms of that, do you see nuclear aviation as the key growth drivers for the SS5 division? In terms of the quantum of order is going forward? Yes.
Manoj Sanghvi
Majority of the revenue both for stainless steel as well as carbon steel is from the oil and gas segment. However, our product portfolio or the customer segmentation in stainless steel is quite varied. Yes, nuclear is picking up and will pick up. We are supplying to the defense and aero industry that also going forward will pick up. But to what extent and to what size? It is very difficult at the moment because these are all long run and long lead time projects.
Radha Agarwalla
Do we have approvals to supply to all these user industries and how difficult would it be for?
Manoj Sanghvi
Yeah, yeah we are supplying to the nuclear power industry as well as to the aero industry. Yes.
Radha Agarwalla
It is to get approvals for competitors in this segment.
Manoj Sanghvi
It is quite difficult and even once you are approved it is difficult further to maintain it also.
Radha Agarwalla
So it would take more than one year to get approved. Is that the right understanding?
Manoj Sanghvi
Yes, definitely more than a year.
Radha Agarwalla
Just one last question and pardon me for my ignorance. So we are one of the largest and the oldest company in Semic seal pipes. I wanted your thoughts on what do you think about or have you ever thought about is it viable for a seal pipe player semicipe sil flare to backward integrate into bars and if it’s viable, some thoughts on that. If not, some thoughts on that would be very helpful.
Manoj Sanghvi
Okay, we are also thinking of maybe going backwards whether it is viable or not that study is going on. However difficult to say at the moment because the capacity for manufacturing pipes is quite less than what a steel plant would be viable at. So standalone only for supplying to your pipe manufacturing may be not viable but we have to see the whole. We have to see the whole picture because certain grades, if you want to develop it is only possible with the steel plant. All the major players around the world, major stainless steel tube and pipe manufacturers they have their own steel plant.
So dependence on availability of raw material, timely availability plus the grades what they can develop. So in long run, yes helps. But standalone just to support your pipeline may be not viable. It has to be supported by sales to the Other industry.
Radha Agarwalla
Okay, so you’re talking about only stainless steel or carbon steel? Sir, for the backward integration.
Manoj Sanghvi
It can be a mix of stainless steel and alloy steel.
Radha Agarwalla
Okay, and what are the global stainless steel cube and pipe manufacturers that you think the product portfolio is? Very good. And you maybe you would want to lead our company to their level in terms of product portfolio, in terms of new product launches, etc.
Manoj Sanghvi
There is one in Japan, there is two or three based out of Europe, a few, a couple of them in the us. Mostly European companies who have manufacturing units in the us. So if we name the one in Japan it is Nippon Sumitomo. Then In Europe there’s Tuba 6, there is Alema. So these are, these are the two manufacturers. And then we have some good manufacturers in China who manufacture tubes through extrusion route. So these are four or five players whom we look up to and definitely some grades. What they manufacture we want to, we want to reach there as soon as possible.
Radha Agarwalla
The tuber 6 India would not have buckwheat integration in India, Is it correct?
Manoj Sanghvi
Tuba 6 India manufactures pierced product. So in that category, I mean we don’t manufacture pierced pipes, of course we compete with them. But then for that low margin or high competitive intensity product, our focus is not so much.
Radha Agarwalla
You mentioned that some of the players in the industry.
operator
Ma’ am, sorry to interrupt. Can you please rejoin the queue for a follow up?
Radha Agarwalla
Yes, yes. I just wanted to thank you sir for explaining everything in detail for surely helpful.
Manoj Sanghvi
Thank you.
operator
Thank you so much. The next question is from the line of Deepaks and Sundaram mutual fund. Please go ahead.
Deepak
Yeah, hello, Am I audible?
Manoj Sanghvi
Yes, yes, yes.
Deepak
I had just one question. You know, if we assume that stainless steel prices at current level, you know, what kind of revenue growth number are we looking at in FY26 given that our order book has been weaker since last two, three years in comparison, you know, what kind of revenue growth are we looking at and what is the sustainable margin, let’s say for FY26, EBITDA margin for our standalone pipe business.
Manoj Sanghvi
So this year the growth can be anywhere between 5 to 10% in terms of volume or maybe if the steel price remain at the same level. Yes. Then on the revenue numbers also and on your second question, which was EBITDA margins. EBITDA margins, again, depending on the product mix, anywhere between 16 to 18%.
Deepak
Okay. Because the last year means, I’m going to say FY25, we have seen a bit of negative operating leverage where we were able to rake in some gross Profit. But due to higher employee and other expenses, our EBITDA has actually degrew in the pipe business. So from that prospect also as actually I was asking.
Manoj Sanghvi
Yes, I agree on that. However, our focus still remains on growth in the sectors where there is less competition, high margin. So we thrive to do that. However, it depends on the projects to come at the same time.
Deepak
Okay, thank you, sir.
Manoj Sanghvi
Thank you.
operator
Thank you very much. The next question is to the line of Samyak Jain from Marcelo. Please go ahead.
Samyak Jain
Thank you for the opportunity. Just one question from my side. In the schooling business on a steady state basis, what kind of margins can we expect for F26 and going forward?
Manoj Sanghvi
What we have targeted this year is a revenue of 350plus crores with an EBITDA margin of roughly 20%.
Samyak Jain
Answer any particular reason for the negative margins in the quarter four in the. In the latest quarter.
Manoj Sanghvi
Latest quarter negative in comparison to.
Samyak Jain
No. So it was. It is negative 20 margin. Like we made a loss in schooling business in quarter four.
Manoj Sanghvi
So. Okay. Consolidated. Consolidated business, right? Yeah.
Manoj Sanghvi
Yeah. Okay. Console basis. See rfss. We could not dispatch what was planned. Plus there was some foreign exchange fluctuation loss. However, if you see on standalone basis, the last quarter was the best quarter for the current for the previous financial year.
Samyak Jain
Understood. Got it, sir. Thank you. Yeah.
operator
Thank you so much. The next question is from the line of Ritesha from Investec. Please go ahead.
Ritesh Shah
Yeah. Hi sir. Thanks for the opportunity. Sir, my first question was on backward integration. Just trying to understand what is the motivation over here. Is it the availability of grades alloys, but in the lead time is more. And that’s the reason why we are going into it.
Manoj Sanghvi
Yes. Security of the raw material grades, timely delivery and development of newer grades.
Ritesh Shah
Okay, so are we looking to put on a electric arc furnace? Induction furnace. How should one read into this?
Manoj Sanghvi
We haven’t decided on it yet. Once we decide, we will give you further details. More details of this. We are still working on it.
Ritesh Shah
Correct. But sir, fair to assume basically we will go into backward integration to the level wherein we make alloy on our own, correct?
Manoj Sanghvi
Yes, we make the stainless steel as well as alloy sealed on our road.
Ritesh Shah
Okay, that’s great. Sir. My second question is on approvals. The company has been there since quite, quite some time. We have most of the approvals in place. But when we look at defense, aerospace, nuclear, are there any approvals that which is not there in our kitty and that we are looking to secure say over next six months, 12 months. And are there any variables that we have started to Actually get to this approvals.
Manoj Sanghvi
So within India we are approved everywhere. Maybe outside for aerospace or other applications. We are still in the process of getting approved.
Ritesh Shah
Okay, but do you think like this is a limiting factor, a constraining factor to our growth or is it not a problem at this point in time?
Manoj Sanghvi
Not a problem at this point in time. But as we increase our cold finishing capacities. Yes, we are looking forward to getting approved in other geographies also. Sure.
Ritesh Shah
And so just last question. We have always been very focused on profitable growth and profitability. Shied away from, as you indicated in the prior question, high volume, low margin businesses. Possible for you to quantify what is the minimum margin and the ROC threshold that we look at. If we had to commit anything incremental on capital allocation, be downstream or upstream.
Manoj Sanghvi
Difficult to comment anything on that. Because see when we are. When we talk about steel plant, maybe the dynamics will change. It’s more of a need than all these parameters. Still very difficult to say right now for the steel plant.
Ritesh Shah
And say for downstream, if it’s a seamless or a welded facility then what is the threshold that we would look at for margins.
Manoj Sanghvi
Or downstream depending on the product. But more or less for stainless steel we see if it is seamless, we see 18 plus percentage of EBITDA margins.
Ritesh Shah
Sure. And ROCE post tax.
Manoj Sanghvi
About closer to 20 or higher.
Ritesh Shah
Sure. This is very helpful, sir. Thank you so much. All the very best.
Manoj Sanghvi
Thank you.
operator
As there are no further questions from the participants I now hand the conference over to Sahil Sanghi for closing comments.
Sahil Sanghvi
Yeah. Just want to thank the management for very elaborately answering all the questions. And also thank the participants for joining the call. Manoj sir, would you like to give any closing comments please?
Manoj Sanghvi
No, I would just like to thank everybody. Thank you for being patient and listening to me. If there are any particular questions with respect to our operations both in stainless steel, carbon steel or any of our subsidiaries, we would be happy to answer them. You can always send by email. Thank you very much.
operator
Thank you very much on behalf of. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Manoj Sanghvi
Thank you.