Rajratan Global Wire Ltd :
was established in 1989, it manufactures bead wire, high-carbon steel wire with specialisation in TBW, which is bronze-coated and used in tyres and drawn steel wire known as black wire used in automobile, construction and engineering industries.
ABOUT
Rajratan Global Wire Ltd was established in 1989, it manufactures bead wire, high-carbon steel wire with specialisation in TBW, which is bronze-coated and used in tyres and drawn steel wire known as black wire, used in automobile, construction and engineering industries.
KEY POINTS :
Product Offerings
Tyre Bead wire :
Used in all kinds of automobile tyres, tyres of earth moving equipment and aircrafts. It prevents vibration during driving and is required for safety, strength and the durability of tyres.
High Carbon steel wire :Used in automobile, construction and engineering industries. It is also known as black wire
Market Position:
The Company is among Asia’s largest bead wire manufacturers ex-China.
The Company's subsidiary Rajratan Thailand is the only bead wire manufacturer in Thailand and has a ~25% market share there.
Rajratan India is the largest manufacturer of TBW in India with a market share of ~50%, also there is a high entry barrier in the TBW industry due to the long approval cycle by tyre manufacturers, and it's a critical product.
Clientele:
As of Q3FY21 85% of customers were associated with the company for more than five years. It services customers in India, Italy, USA, The Czech Republic, South Korea, etc.
Indian Clients : Apollo tyres, ATG, Birla Tyres, CEAT, MRF, Balkrishna, etc.
Thailand Clients : Bridgestone, Sentury Tire, Destone, etc.
International Clients : Toyo Tires, Nankang, Trelleborg, etc.
Facilities:
Presently, the company has a combined installed capacity of 1,12,000 Tonnes p.a. (TPA) of bead and black wire from its facilities in India and Thailand :-
1. Pithampur (M.P.) India - 72,000 TPA
2. Ratchaburi, Thailand - 40,000 TPA.
It undertook aggressive CAPEX programs during FY19-21 and increased its capacity from 62,000 in FY19 to 1,12,000 in FY21.
Geographical Split FY21
India - 66%
Rest of the world - 34%
Customer Concentration:
During FY21, the top 3 customers of the company contributed ~39% of total revenues of the company.
Tax Benefit:
The company's Thailand subsidiary/division will receive tax benefit on the profits reported on all the production in excess of 22,000 TPA for a period of eight years.[12] This benefit is expected to expire by 2025.
Focus:
Rajratan is largely focused on the manufacture of bead wire 87% of total capacity and 90% of revenues in FY20.
It also plans to expand its Thailand plant's capacity to 60,000 TPA by the end of FY22.
Raw Material Fluctuations:
The company is able to pass on the Raw Material price increase with a slight lag to its customers.
Market Cap:
₹ 5,765 Cr.
Current Price:
₹ 1,136
High / Low:
₹ 1,151 / 362
Stock P/E:
42.1
Book Value:
₹ 67.2
Dividend Yield:
0.18 %
ROCE:
39.7 %
ROE:
43.8 %
Face Value:
₹ 2.00
Share holdings patterns:
Promoters: 65%
DIIs:8.04%
Public:26.96
