Rama Steel Tubes Ltd Management Discussions.


2020 was an unprecedented year that saw huge demand destruction, instability and uncertainties due to the COVID-19 pandemic. However, sizable and swift fiscal, monetary and regulatory responses by most Governments helped prevent worse outcomes and led to a stronger than expected economic recovery in the second half of 2020. According to International Monetary Fund (IMF), the global economy isexpected to contract by 3.2% in 2020.

The global economy is now experiencing a fast recovery with growth likely to approach 6.0% in 2021 and continue at 4.9% in 2022. The strength of recovery will remain uneven depending on the severity of the pandemic in each country, the effectiveness of policy stimulus and access to vaccination. China, India and Turkey have progressed above pre-pandemic levels driven by strong fiscal measures and a recovery in manufacturing and construction. The substantial fiscal support announced in 2021, notably in United States and Japan, together with unlocking of Next Generation EU funds, will help lift economic activity among advanced economies. However, new mutants of the COVID-19 virus, second/third waves of infections, re-imposition of lockdowns in many countries and uneven access to vaccines across world continue to weigh on the outlook.


The Indian economy declined sharply during first half of FY21 as the country witnessed a complete standstill of activities due to the forced lockdown starting March 2020. Thiswas followed by encouraging government and central bank interventions at rapid intervals and assignation of the medical fraternity for vaccine development, which holds the potential to bring stability.The revival in second half of FY21 was supported by continued normalization of economic activities, robust growth in the agriculture sector and restoration of manufacturing, construction, banking and real estate activities. Rapid rollout of vaccines coupled with Governments efforts on stimulating growth improved consumer sentiments.

According to provisional estimates by National Statistical Office (NSO), Indian GDP is estimated to contract by 7.3% in FY21 as com pa red to g rowth of 4.0% i n FY20.

Source: National Statistics Office; FY21 Provisional Estimates dated 31 st May, 2021

* RBI Monetary Policy June2021

The trajectory of the pandemic still remains unpredictable to a very large extent, with country already witnessing a second wave of COVID-19 since March 2021 .The lockdown imposed during the second wave was regional in nature and less restrictive. The Indian economy is projected to grow by 9.5% in FY22 as per RBI. The pace of vaccination will play a very critical role to avoid severe waves of infection in future. However, with better awareness and understanding of the virus, mass vaccination drives and preparedness to work with restricted mobility, businesses and households alike saw a relatively better economic momentum this time. Further, on the positive side, improvement in external demand should support Indias export sector, while normal monsoon may revive rural demand faster, although increasing COVID-19 spread to rural areas poses downside risks.

The trajectory of the pandemic still remains unpredictable to a very large extent, with country already witnessing a second wave of COVID-19 since March 2021.

The lockdown imposed during the second wave was regional in nature and less restrictive.The Indian economy is projected to grow by 9.5% in FY22 as per RBl.The pace of vaccination will play a very critical role to avoid severe waves of infection in future. However, with better awareness and understanding of the virus, mass vaccination drives and preparedness to work with restricted mobility, businesses and households alike saw a relatively better economic momentum this time. Further, on the positive side, improvement in external demand should support Indias export sector, while normal monsoon may revive rural demand faster, although increasing COVID-19 spread to rural areas poses downside risks.


Despite the influence of the COVID-19 pandemic and its different regional impacts, the global steel industry was fortunate to end 2020 with only a minor contraction in finished steel demand.This was due to the robust recovery in China with steel demand growth pegged at 9.1% in 2020, while the rest of the world (excluding China) steel demand contracted by 10%. According to the World Steel Association (WSA), the global steel demand is expected to increase by around 5.8% to 1,874 Million Tonnes (MT) in 2021 and further by around 2.7% to reach 1,924.6 MT in 2022.

Source: World Steel Association - Short Range Outlook Report April2021;MT-Million Tonnes

Chinas economy saw an accelerating rebound from the lockdown in late February 2020 due to successful control of the virus, government stimulus, and strong exports. Regardless of the initial disruptions, all steel using sectors in China posted positive growth in 2020 with the construction sector, in particular, recorded growth of 8.5% YoY supported by infrastructure investment. Due to this strong activity coupled with some inventory accumulations, China reported growth of 9.1% in 2020 for apparent consumption of finished steel products. As moststeel-using sectors are expected to show moderate growth, Chinas steel demand is expected to grow by 3.0% in 2021, but decelerate to 1.0% growth in 2022.

Region-wise Finished Steel Demand in 2020-1,772 MT

Source: World Steel Association - Short Range Outlook Report April 2021

Developing economies excluding China suffered more from the pandemic as compared to the developed economies, due to inadequate medical capacity, a collapse in tourism and commodity prices, and insufficient fiscal support. Steel demand in the developing economies excluding China declined by 7.8% in 2020. Benefitting from the global economic recovery and with renewed government infrastructure initiatives, steel demand in the developing economies is expected to show a relatively quick rebound in 2021 and 2022, with growth of 10.2% and 5.2% respectively.

The structural changes in a post-pandemic world will bring about paradigm shifts in steel demand shape. The steel industry will see exciting opportunities from rapid developments through digitalisation and automation, infrastructure initiatives, reorganisation of urban centres, and energy transformation. However, the industry remains subject to various risks such as reduction in government stimulus programmes, renewed waves of COVID-19, new mutants of virus, slow vaccination etc. Mainland China has also started enforcing emissions restrictions tightening global steel supply, which may lead to increase in steel prices.


The steel sector plays a vital role in Indian economy contributing over 2% to Indias GDP and employs over 500,000 people directly and 2.50 million indirectly. Indian Steel Industry is structurally fragmented marked by presence of few major integrated players and numerous small and mid-sized players. India is the 2nd largest global Crude Steel producer in 2020.

Indias production of crude steel fell by 5.9% to 103 million tonnes and finished steel fell by 7.3% to 95.1 million tonnes in FY21 as the COVID-19 pandemic hampered production mainly in Q1FY21. However, the domestic steel industry made a quick recovery in the second half of FY21 riding on the back of higher international steel demand and revival in domestic demand. By Q2FY21 domestic crude steel production reached 96% of pre-Covid levels and by Q3FY21 production was 7.5% higher on YoY basis. In Q4FY21, crude steel production increased by 7.4% as manufacturers ramp up output on account of higher seasonal demand. Consumption of finished steel fell by 6.7%YoYinFY21.

Source: Ministry of Steel, *CARE Ratings Trade scenario in FY21

During FY21, export of finished steel from India was higher by 29.1% at 10.8 MT as compared to export during FY20, mainly driven by China. Share of export to Italy rose to 22% in March 2021 from 12% in March 2020. Share of export to Spain and Hong Kong rose to 5% and 10%, respectively from just under 1% in March 2020. India was net exporter of finished steel during FY21 with net trade surplus of 6 million tonnes. Import of finished steel stood at 4.8 MT, which was lower by 29.8% over the previous year.

Source: Ministry of Steel, *CARE Ratings

Besides being the 2nd largest global Crude Steel producer in 2020, India has also made a mark globally in the production of Sponge Iron/Direct Reduced Iron (DRI). India is also a leading producer of Sponge Iron with a host of coal-based units, located in the mineral-rich states of the country. Over the years, the coal-based route has emerged as a key contributor and accounted for 82% of total sponge iron production in the country in 2020. India has been the worlds largest sponge iron producer every year since 2003.


According to CARE Ratings Indias crude steel production is expected to reach 112-114 million tonnes in FY22, which would be a growth of 8%-9% YoY. Steel demand in FY22 will be supported by economic recovery, government spending and enhanced liquidity. The Union Budget for 2021-2022 aimed at infrastructure creation and manufacturing to propel the economy and had a sharp 34.5% YoY increase in allocation for capex at 5.54 lakh crore. Therefore, enhanced outlays for key sectors like defence services, railways, roads, transport and highways would provide impetus to steel consumption, which is expected to grow by 10%-12% in FY22 to cross 100 MT for thefirst time ever.

An increase in steel prices in expected to continue in FY22. Stimulus package unveiled by various countries will keep demand for steel high in the international market. Absence of China from the world export market and higher import of steel from China is one of the major factor keeping steel prices elevated. Continued higher demand from China on the back of stimulus package and the countrys desire to bring down production levels in 2021 to reduce Co2 levels will bean importantfactorthat will strengthen steel prices. Demand-supply imbalance in the global market will also continue to present export opportunities to domestic players.


The government has taken various measures to ensure healthy growth of the steel industry in India. The Make in India will provide impetus to the growth in steel demand. The Governments focus on improving infrastructure, smart cities mission, affordable housing, dedicated freight & high-speed rail corridors, expansion in electricity generating capacity especially using solar energy is expected to create significant demand for steel in the country. Few other initiatives include the following:

• National Steel Policy 2017: National Steel Policy (NSP) formulated by the Ministry of enshrines the long term vision of the government to give impetus to the steel sector. The policy envisages to create a technologically advanced and globally competitive steel industry that promotes self-sufficiency in steel production as well as economic growth. The policy projects crude steel capacity of 300 million tonnes (MT), crude steel production of 255 MT, finished steel production of 230 MT and a robust finished steel per capita consumption of 160 Kgs by FY31, as against the current consumption of 74 Kg. To achieve this target, the ministry of steel has released a draft policy in December 2019 for the promotion of Greenfield steel plants in India to the tune of25-30 MT capacity by FY25.

• Setting up value addition focused steel clusters: In September 2020, the Ministry of Steel prepared a draft framework policy for facilitating and establishing greenfield steel clusters, along with development and expansion of the existing steel clusters. This will further increase employment opportunities within the sector.This move would also support in evolving of MSMEs in the steel sector and motivate them to produce more value-added products.

• FDI: 100% FDI through the automatic route allowed in the Indian steel sector.

• Increase in Export Duty: The government hiked the export duty on iron ore to 50% ad valorem on all varieties of iron ore (except pellets) to ensure supply to domestic steel industry.

Steel Scrap Recycling Policy: The Government introduced Steel Scrap Recycling Policy aimed to reduce import, conserve resources and save energy.

• Research and Development (R&D) Promotion:

• The Ministry of Steel has established a task force to identify the need for technology development and R&D.The Ministry has issued necessary direction to the steel companies to framea strategy for taking up more R&D projects by spending at least 1% of their sales turnover to facilitate technological innovations in the steel sector.

• In January 2021, the Ministry of Steel, signed a Memorandum of Cooperation with the Ministry of Economy,Trade and Industry, Government of Japan, to boost the steel sector through joint activities under the frameworkof India-Japan Steel Dialogue.

• Steel producing Companies are attempting coal gasification and gas-based direct-reduced iron (DRI) production. Other alternative technologies such as Hismelt, Finex and ITmk3 being adopted to produce hot metal

- Production-linked Incentive (PLI) Scheme: In November 2020, Union Cabinet approved the production- linked incentive (PLI) scheme in 10 key sectors (including electronics and white goods) to boost Indias manufacturing capabilities and exports and promote the Atmanirbhar BharatRs.initiative. India is a net exporter of finished steel and has the potential to become a frontrunner in certain grades of steel. A PLI scheme in specialty steel will help in enhancing manufacturing capabilities for value-added steel which will lead to an increase in total exports.

- Duty drawback benefit: In October 2020, Directorate General of Foreign Trade announced that steel manufacturers in the country can avail duty drawback benefits on steel supplied through their service centres, d istributors, dea lers a nd stock ya rds

Source: IBEF,PIB


Steel tubes and steel pipes are among the most commonly used components in a wide range of industrial sectors, such as construction, mining, oil & gas, and manufacturing industries. The global steel tubes & pipes market was valued at USD 142.4 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 6.2%from 2020 to 2027 to reach USD 231.1 billion by 2027. The oil & gas application segment which accounted for 51% in 2019, is anticipated to remain the dominant application segment over the forecast period. However, with the emergence of the global pandemic steel pipes is the oil & gas industry faced its worst crisis ever with oil prices plummeting to USD 21.04 per barrel during COVID-19 first wave. Although the oil prices have regained a level above USD 60 per barrel from February 2021 because of a production cut to protect margins, the demand is slowly regaining normalcy.To match the increasing global demand for oil, the oil sector is now witnessing revival in capex to garner the required supply growth which brings in several global opportunities to pipe manufacturers. As the governments across the world refocus on infrastructure projects such as water and sewage systems and oil and gas pipeline networks, the demand for steel tubes and pipes are expected to rebound.

Since the past few years, Electric Resistance Welded (ERW) pipes & tubes are gaining prominence in the market owing to their low prices and modest performance. Modern welding technologies, such as high-frequency welding, that are being increasingly integrated into the process of manufacturing ERW pipes & tubes act as a crucial factor supporting the segment growth.

Impact of Covid-19 in Steel Pipes andTubes Market

Due to the COVID-19 pandemic, the demand for steel pipes plunged as the construction activities halted with the rising number of infections. However, as the first wave retracted, the governments responded with hefty spending on infrastructure to boost the economies. With the onset of second wave, curtailment measures like lockdowns and curfews once again took the centre stage resulting in supply chain disruptions, labour shortages, financial losses, and temporary adverse impact on investments. Consequently, according to CARE Ratings, global steel tubes & pipes industry recorded a slump of 10.60% implying destruction of 7.3 million tonnes in consumption. Recovery in oil prices and a parallel improvement in spending on exploration and production activities is expected to brighten the medium-term outlook for oil pipeline-related infrastructure projects.

Source:https://www.grandviewresea rch.com/indust ry-analysis/steel-pipes-tubes-market

CARE Ratings


Indias steel tubes and pipes industry is presently valued at nearly Rs 60,000 crore, accounting for around 8% of the global steel tubes & pipes industry. The production of steel tubes and pipes has grown at a CAGR of 7.69% from 4.97 million tonnes in FY17 to 6.68 million tonnes in FY20. The growth is mainly attributable to incremental demand emanating from growth in domestic water infrastructure mainly driven by Jal Jeevan Mission, oil exploration, construction, infrastructure, and expansion of gas pipelines such as national gas grid and city gas distribution. As a result, the consumption growth outpaced the production growth and expanded with a CAG R of 11.03% over the period FY17 to FY20.

The COVID-19 pandemic deeply affected the steel tube and pipe industry during first half of FY21. Both supply and demand were impacted due to the closure of cross-country borders and stringent nationwide lockdown. With unlocking of the economy and resumption of construction activities, the industry witnessed a V-shaped recovery in the second half of FY21. Steel consumption and demand for steel tubes and pipes are expected to improve in FY22 driven by water transportation, oil and gas, firefighting, construction, and infrastructure segments, among others.

Indian Steel Tubes & Pipes - Production and Consumption Trend (in MT)

Steel pipe and tube industry structure

Based on the manufacturing method, the industry is largely split between Electric Resistance Welded (ERW) and submerged arc welded (SAW) and seamless together referred as S&S segment. Within welded pipes, electric resistance weld (ERW) pipes and tubes are mostly used in construction, water and oil & gas transportation, and automotive components. ERW tubes that are used in construction are known as structural steel tubes.

The decreasing share of unorganized and small players and increasing dominance of larger players is expected to result in better pricing power and margins for the larger players especially in ERW segment which has been the most fragmented segment historically, while other segments such as SAW, ductile and seamless pipes segments are traditionally dominated by few large players.

Majorgrowth driversforSteelTubesand Pipes Industry

The prospects for steel tubes and pipes industry are expected to improve on the back of revival of infrastructure projects and investment sentiment. The majorgrowth drivers include:

• The increase of government spending on infrastructure projects, affordable housing, smart city development shall boost the demand for steel pipes and tubes. National Infrastructure Pipeline (NIP) has a capex outlay plan of about Rs.111 trn (US $1.6trn) over FY21 -25

• The Governments emphasis on projects like increasing the share of gas in energy mix, improved focus on domestic water segment, allocation in RsNal se Jal scheme etc. will further boost the demand growth of steel tubes and pipes.

• In the natural gas sector, the Prime Minister has already announced the target of One nation, one gas gridRs.in which the natural gas grid is expected to expand by 17,000 Km taking the total length of pipelines to 34,500 Km by 2025. Efforts to move towards a gas-based economy along with the impetus on implementation of city gas distribution networks is going to be a major driver for the demand in the steel pipe sector.

• India is expected to become a preferred location for global manufacturing in the medium and long term led by initiatives such as Make in India, vocal for local, performance-linked incentives schemes and China plus one strategy being adopted by consumption-driven economies across the globe.

The major Government initiatives that are supposed to augment the demand for steel tubes and pipes are highlighted below:

Housing for All by2022

• 100 Smart Cities

• 24x7 Electricity - DDUGJY (Deen Dayal Upadhyaya GramJyotiYojana) /SaubhagyaYojna

• National Highway Development Programme - Bharatmala programme

• Port connectivity through the Sagarmala programme

• Renewable Energy Target 100 GW

• PMKrishiSancharYojna

• Swachh Bharat Abhiyan

• Access to at-least basic sanitation

• Network of water transmission pipelines to link rivers, canals and other water bodies across the country

• Infrastructure to improve the utilization of Ganga - Brahmaputra - Meghana river basin

• AMRUT scheme launched to enhance sewage treatment capacities


Rama Steel Tubes Limited (hereafter referred as "RSTL" / "the Company") is one of the leading player in the Indian steel tubes and pipes industry. Incorporated in 1974 by late Shri. Harbans Lai Bansal, RSTL is currently managed by his son Mr. Naresh Kumar Bansal and grandson Mr. Richi Bansal. The Company is primarily engaged in the manufacturing and trading of Steel Tubes & Pipes & Galvanised Iron Pipes in India as well as in the world. With more than four decades of legacy, the Company markets its product under the brand name "TTT Rama" and has established strong brand recognition across the world. RSTL has establishes its global presence in the export market in the UK, Middle East, Africa and South America. The strategically located state-of-the-art manufacturing facilities in the North, South and West India provides a competitive edge to the Company in the respective market regions.

Robust Product Portfolio: RSTL offers a diversified mix of products, which has helped it fortify its market share and position itself as the leading pipe solutions provider. The Company provides customised products and continuously working on innovating new products as per market dynamics and evolving customer needs.

RSTLs niche product includes ERW (electric resistance weld) Black Pipes and Galvanised Steel Pipes.The products manufactured by the Company find use in various industries, including automobiles, infrastructure, irrigation and real estate. The major products of the Companyinclude:

• Steel Tubes and Pipes: The major products manufacture by Company in this segment are ERW galvanised tubes and pipes, ERW Black steel tubes and pipes, scaffolding tubes and pipes, pre-grooved pipes, swaged poles etc. Its MS ERW black pipes vary from 15mm to 200mm in diameter and confirm to IS: 1239, IS:1161, IS:3589, IS:3601, & IS:4270. The Companys G.I. Pipes range from 15mm to 150mm NB in light, medium and heavy sizes. The major application areas include water pipelines, agriculture and irrigation, deep tube wells & casing pipes, fencing tubes, gas pipe lines and cross country pipelines.

• Telecommunication Transmission Tower & Substation Structure: Over the years, RSTL has built up expertise in designing and maintenance of significantly customisable high & light towers products like Legged Square Lattice Steel Towers, Three Legged Tubular Steel Tower etc. The Companys other application areas include Radar Towers and Railway Electrification Structure.

• Structural Steel Products: It include Square / Rectangular Tubes & Pipes with hollow sections and is primarily used in furniture industries, hand railings, cranes, material storage racks, pallets, staircases, cabins, bus stands, milk booths, truck & bus body members trusses, trolleys, columns and purlins etc.

Coils and Sheets: The Company also manufactures and trades various cold rolled coils/sheets, galvanised plain coils/sheets, galvanised corrugated sheets, colour coated coils/sheets.


Niche player with market leadership: Over the years, RSTL has established itself as one of niche and leading player in Indian steel tubes and pipes industry. The extensive experience of the promoters

• and the Companys long track record of operations provide the necessary technical expertise, brand recognition and long standing relationships with various stakeholders for its business.

• Strategically located manufacturing units: RSTL has four strategically located state-of-the-art manufacturing facilities spread across North, South and West India. Two manufacturing facilities are located at Sahibabad, Uttar Pradesh with installed capacity of 60,000 Metric tonne per annum (MTPA), one in Khopoli, Maharashtra with installed capacity of 132,000 MTPA and one Anantapur, Andhra Pradesh with installed capacity of 36,000 MTPA. The Company has total consolidated installed capacity of 2,28,000 MTPA as on March 31, 2021. RSTL derives locational advantage of its manufacturing facilities owing to close proximity to ports and commercial markets. In FY21, capacity utilization stood at 52 % with 77830.21 MTPA as against 70149.15MTPA in the previous year.

• Gaining International footprints: Underpinned by solid foundation, rich experience, and diversified product portfolio, the Company has established its strong hold in global market with presence across more than 17 counties especially in the UAE & Africa regions. RSTLs products are exported across the world, mainly in the countries like United Kingdom, UAE, Sri Lanka, Ethiopia, Kenya, Uganda, Somalia, Ghana, Sudan, Kuwait, Republic of Congo, Yemen, Guyana, Germany, USA, South Africa, Zambia and Malta etc. RSTL keeps close watch on global developments with an aim to cater to global requirements to the maximum extent possible. The Company is in the process to set up manufacturing unit in Nigeria and has acquired land for thesameduring FY21.

• Diversified Customer Base: RSTL offers an end-to-end integrated solution to its customers, wherein the Company executes the whole project for clients. Over the years the, RSTL has been able to build a reputation as a trustworthy player and has developed diversified and marquee customer base. Some of the leading clients includes BSES Rajdhani Power Limited (BSES), Gujarat Gas Limited, J&K Rural electrification, Purvanchal Vidyut Vitran Nigam Limited, UP & Utrakhand Peyjal Nigam, HPCL Bhatinda & Manglore Refinery Project.

Leveraging Technology: The Company has a policy of technology absorption and makes continuous efforts to bring Innovation in all spheres of its activities. The Company emphasises to serve its customers with superior quality products and increase efficiency by leveraging its advanced technology to modernize production. To take the lead & full fill the market demand, RSTL has installed a modern high speed Tube Mill based on latest technology of world leader M/s Kusakabe of Japan.


• On-going Capacity Expansion: RSTL has made requisite capacity expansions from time to time to build the best-in- class manufacturing facilities. In order to manufacture products of different dimensions and specifications, the Company is doing capacity expansion at Anantapur, Andhra Pradesh. As a result, Anantapur, Andhra Pradesh plant capacity will increase from 36,000 MTPA to 72,000 MTPA. Hence, the total capacity of the Company will increase from 2,28,000 MTPA to 2,64,000 MTPA leading to efficiencies from larger scale of operations. The Company is also undergoing total upgradation of old machines with new technology at Sahibabad, Uttar Pradesh plant which is expected to complete by Q3FY21.

The Company will continue to leverage through product development capabilities to launch niche items that address high-demand applications, this will begin by backward integration capacity of 50,000 tonnes per year going upto 200,000 tonnes of total capacity by end of FY24. RSTL will roll out a cold rolling mill and the Strip Galvanising plants to produce the additional value added products at Anantapur Plant, Andhra Pradesh

• Strengthening operations in South India:The Anantapur facility in Andhra Pradesh under its subsidiary, Lepakshi Tubes Pvt Ltd. has recorded 30% production growth during FY21.The Company is planning to set up another line of production in this facility for product size upto 8- inch diameter to cater the diversified demand in the southern regions.The on-going expansion at the Lepakshi plant was halted temporarily due to re-emergence of COVID-19 led lockdown. However, the same is expected to complete by end of Fy22.

• Enhancing marketing and distribution:The Company has established an efficient distribution channel of authorized dealers spread over North, South and West India. As on March 31,2021, the Company has outreach in most of the cities in India through a dealer network of 300+ touch- points. The Company focuses on further expanding its distribution reach has strengthened senior level marketing team during theyear under review.

As a part of the marketing initiative, the Company has taken major initiative to adopt and launch their new brand identity. RSTL has adopted new logo, creating new website, which is under development and circulating some of the digital media posts. This will helpthe Company to align with existing market & industry scenario and would be more appropriate for current and future communication with stakeholders.

• Growing capabilities for Solar Energy sector and Government Schemes: RSTL, has a wide variety of products to suite the varied needs of nations infrastructure Like Roads, Buildings Construction, Urban Transportation, Water Supply, and Electricity Transmission & Distribution. The Company is eyeing to venture in products for solar energy projects as the under-going and planned capacity expansion in solar energy will generate huge demand for steel pipes. In order to expand further, RSTL focuses on business growth opportunities from government schemes such as housing for all, affordable housing, smart cities, national highway development programme, Swachh Baharat mission, NAL Se JAL, Jal Shakti Scheme, RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana), DDUGJY (Deen Dayal Upadhyaya Gram Jyoti Yojana) etc.

• Safeguarding future energy requirements: Post the success of 750 KW solar power plant in Khopoli Unit, the Company is looking to set up solar power plant of 1 MW each at Andhra Pradesh and Uttar Pradesh in order to optimise its power costs.

• Heading towards professional driven Company: The Company has been hiring senior management professionals across various functions to drive the next level of growth and synergies. During FY21 the Company has recruited quality resources at top positions in the field of marketing, strategy planning, plant operations etc.


Consolidated Financial Highlights

Financial Snapshot (Rs crore)




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Other Income




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PBT (after share of net profits of investments in associates and joint Ventures)




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Despite significant challenges posed during FY21 due to COVID-19 pandemic and subsequent lockdowns and restrictions, RSTL has shown robust performance in FY21 in terms of sales volume, revenues and profits. Total consolidated revenue from operations increased significantly by 33.34% to Rs 470.43 crore in FY21 as against Rs 352.81 crore in FY20. The EBIDTA (earnings before interest, depreciation and tax) increased by 98.54% YoY and stood at Rs 24.46 crore in FY21 as compared to Rs 12.32 crore in FY20. Interest expense reduced by 20.08% from Rs 9.63 crore in FY20 to Rs 7.70 crore in FY21 .The profit before tax (PBT) after including share of associates and joint ventures stood at Rs 14.71 crore in FY21 as compared to Rs 2.11 crore recorded in FY20. The PAT increased tremendously to Rs 12.38 crore in FY21 as against Rs 0.43 crore in FY20. EPS for FY21 was Rs 7.21 as against Rs 0.49 in Fy20.

Details of Key Consolidated Financial Ratios that registered more than 25% change during FY21

Debtors Turnover (x)




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Interest Coverage Ratio (x)




Current Ratio (x)



-3.45 %

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Operating Profit Margin (%)




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Return on Networth - RoNW (x)





• The Companys debtor turnover ratio increased to 7.56x in FY21 from 5.17x in FY20 mainly due to increase in net sales and decline in average debtors.

• At the end of March 31,2021, the Companys net worth stood at Rs 99.94 crore as compared to Rs 87.83 crore as on March 31,2020.The total debt increased from Rs 83.17 crore in FY20 to Rs 85.44 crore in FY21 however increase in net margin due to better price realisation and sale of product mix resulting in a lower debt/equity ratio of 0.85 as compared to last years ratio of 0.95. The cash and cash equivalents stood at Rs 22.17 crore for FY21 as against Rs 13.11 crore recorded in FY20. Optimisation and efficiently utilisation of fund has led to decline in interest expense thereby improving interest coverage ratio in FY21.

• Operating profit increased two-fold times from Rs 9.42 crore in FY20 to Rs 21.00 crore in FY21. As a result, there was significant increase in operating profit margin.

• The significant growth of PAT resulted in improving net profit margin and return on Networth.


The management has evaluated the possible impact of COVID-19 pandemic on the business operations and the financial position of the Company and no material adverse impact has been found. Despite the challenging business environment, RSTL continue to maintain a high quality of operations, capacity expansion, widening its market reach and a robust financial position.

The second wave of COVID-19 may impact the Company in terms of lower demand. However, domestic demand is likely to bounce back post the end of the monsoon, which would largely drive by the infrastructure and construction sector and mass vaccination programme. Though, COVID- 19 has impacted the normal course of business but the Company is well-positioned to make most of the opportunities when the situation normalises. The management will continue to monitor any material changes to its COVID-19 impact assessment, resulting from the future economic conditions and future uncertainty, if any.


India is expected to become a preferred location for global manufacturing in medium and long term, which shall further make the Company more competitive considering its strong brand presence, PAN India operations, diversified product portfolio and extensive dealer network mainly in rural and semi-urban areas. In addition, on-going capacity expansion to add new product range coupled with long standing relationships with customers and suppliers will further help RSTL to achieve higher growth going forward. Moreover, with various initiatives in the end-user segments, supportive Government policies, strong industry position and capacities, the Company anticipates continuous order inflow and sustainable growth in the future.


RSTL aims to actively contribute to the social and economic development for evolving a sustainable society. The Company has Corporate Social Responsibility ("CSR") Policy in place, which articulates positive contribution towards economic, environmental and social well-being of communities through its CSR activities. RSTL intends to create the Companys image as a reliable, credible, responsible business partner by making a positive difference in the society, where the Company operates its business.The CSR Committee is in place,, to formulate and recommend CSR Policy to the Board. The Committee monitors in areas such as waste management, sanitation activities, providing skill development and vocation based education, working for the upliftment of the lives of under privileged and women & youth empowerment. It also contributes towards certain areas like Environmental sustainability, Disaster Relief and National Missions projects. During the year under review, the Company has spent Rs 19.95 lakhs towards the CSR expenses on women empowermentand skill development.


• Economic Risk: Any slowdown in economy will impact the steel demand from end user segments like oil and gas, construction, capital goods, consumer durables, automobiles etc. Further, any delay in revival of planned industrial capex due to macro-economic factors for instance COVID-19, would impact the growth of the Company.

• Mitigation strategy: The Company has well diversified and balanced product portfolio with multiple end user sectors and strong hold in international markets. In addition, the Companys strong brands positioning helps reduce exposure to business cycles. RSTL has resilient business model and proactive strategies in the face of changing economic scenario. This is reflected in FY21 as the Companys revenue and profitability increased significantly despite COVID-19 challenges.

• Supply Demand Risk: Overcapacity and oversupply of steel globally may lead to higher imports in India at cheaper rate resulting into fall in steel prices.

Mitigation Strategy: RSTL has established itself as a pioneer in the industry with an expansive reach across the world, diverse customer profile, proven expertise, long standing customer relationship and focus on constant upgradation of facilities. The Company establish and maintains optimal production capacity based on a realistic steel demand outlookand market forces.

• Competition Risk: The Company might receive stiff competition from its peers in terms of new market entrants with better technology or change in marketing strategy by the competitors.

Mitigation Strategy: RSTL manufactures the best quality product with latest advanced technology and rich expertise ensuring value addition for its customers. Over the years the Company has established strong brand equity and continuously working on upgrading marketing strategies. The Company focuses on efficient and cost effective manufacturing operations. As one of the leading players, the Company strives to meet evolving needs and satisfies customer demands by constantly adding capacities and capabilities in its strategically located manufacturing facilities.

• Input Risk: The Company is exposed to volatility in the price of raw materials, which forms significant part of the overall cost. Any disruption in availability or sharp increase in raw material prices will erode margin.

Mitigation Strategy: The Company continuously monitors the price movements and undertakes the necessary strategy or adopts remedial measures to offset this risk.The risk of supply chain is alleviated to some extent by geographical and vendor diversification of critical raw material requirements. The Company has placed clear terms for long term contracts of raw material with suppliers. Moreover, inventories are maintained in buffer and RSTL adjust its inventory levels based on the demand supply scenario.

• Regulatory Risk: The Company operates in a highly regulated and competitive environment across multiple geographies. Increased regulatory oversight and adverse changes to regulations in key markets could adversely impact theCompanys business of operations.

Mitigation Strategy:The Company constantly monitors the changing regulatory scenario and undertakes necessary changes as per the requirement. As a responsible organisation, the Company continuously invests in training as well as automated systems ensuring compliances to all applicable guidelines and regulatory norms.

• Foreign Exchange Risk: The Company is exposed to currency risks as the import of raw materials, and the export of finished products across the international geographies as well as several miscellaneous payments involve dealings in foreign currency. Any adverse movement in currencies might affect the Companys revenue and profitability.

• Mitigation Strategy: The Company has in place well- defined Foreign Exchange (FX) risk management system, which regularly monitors the currency fluctuations and optimises the risk using various hedging activities. In addition, the Company hedge its foreign currency exposure by using various derivative financial instruments, such as forward contracts.


RSTL places utmost importance on health and safety of its employees and the environment it operates within. It is ensured that employees are adequately trained to execute their responsibilities with precautions and all the possible measures are undertaken to keep the environment safe and hygienic. The Company has dedicated teams to maintain occupational safety at manufacturing units and ensure that all rulesand norms relating to EHS are followed. . Through clear communication and transparency, it tries to ensure a zero-hazard work environment. EHS management includes increased integration with other software systems such as ERP to better streamline it in order to achieve overall sustainability management. The Companys policies and procedures related to EHS are regularly reviewed and updated to ensure that they meet industry standards.


RSTLs objective is to deliver value to its customers and other stakeholders with its high-quality products by leveraging its robust Quality Management System. The Company constantly put efforts to ensures that all its products are of superior quality and comply with applicable standards. RSTL has in place the checks and quality testing systems from the procurement of raw material to the products manufacturing and distribution. The Companys manufacturing facilities are highly automated and centrally controlled to manufacture the best quality product with latest technology and rich expertise. Total Quality Control (TQC) is carried out through the whole process of production and the configurations of operation are being stringently respected. Also the Company has also put in place comprehensive systems and procedural quality standards, which are being strictly observed and safety protocols are being thoroughly enforced.


RSTL has put in place a strong internal control mechanism to safeguard all its assets and ensure operational excellence. The mechanism also meticulously records all transaction details and ensures regulatory compliance. The internal control framework is commensurate with the nature of the business, size, scale and complexity of its operations. The Company has proper and adequate systems of internal financial controls, which ensure that transactions are authorized, recorded and reported correctly. Regular internal audits and checks ensure that responsibilities are executed effectively. Audit committee is responsible for implementation and maintenance of adequate internal financial controls to ensure the orderly and efficient conduct of its business.The Audit committee review important issues and material weakness raised by the internal and statutory auditors on a periodic basis. Timely and adequate measures are undertaken ensuring that the risk is mitigated appropriately with necessary rectifications.


RSTL believes that employees are the pillars for the success of the organisation. The Company takes pride in acknowledging the performance of its human resource, which has always responded with deep commitment to achieve business growth and market leadership. The top management acts as the governing force in ensuring a progressive work culture. The Company believes in reinforcing the key thrust areas i.e. being the employer of choice, building an inclusive culture, building a strong talent pipeline and building capabilities in the organisation.

The HRdevelopment framework ensure employees career progression and greater connect with the Company. This framework rides on multiple programs and opportunities for individual training, skill up-gradation, congenial atmosphere for employee-management relationship and equal opportunities. The Company continued to build on the diversity and inclusion agenda through building leadership capability and respectful work environment for the teams. The leadership development frameworks are focused on the core capabilities, which are essential for strong and effective leadership. As of March 31,2021 the Company had a workforce of 250+ peoples.


This Statement contains forward-looking statements about the business, financial performance, skills and prospects of the Company. Statements about the plans, intentions, expectations, beliefs, estimates, predictions or similar expressions for future are forward-looking statements. Forward-looking statements should be viewed in the context of many risk issues and event that could cause actual performance to be different from that contemplated in the Directors Report and Management Discussions and Analysis Report, including but not limited to, the impact of changes in oil, steel prices worldwide, technological obsolescence and domestic, economic and political conditions. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors. The Company disclaims any duty to update the information given in the aforesaid reports.