#RajratanGlobalWire
Rajratan Global Wire along with its subsidiary,Rajratan Thai Wire Co. Ltd., is engaged in the business of manufacturing and sale of Tyre Bead Wire. The Company is one of the fastest growing bead wire manufacturers in the world, only manufacturer in Thailand
Rajratan Global Wire along with its subsidiary,Rajratan Thai Wire Co. Ltd., is engaged in the business of manufacturing and sale of Tyre Bead Wire. The Company is one of the fastest growing bead wire manufacturers in the world, only manufacturer in Thailand
The company has a market cap of 220Cr. The company has a market share of 35% for tyre bead wire in India and a market share of 20% in Thailand. 84% of the revenue comes from Tyre bead wire, 13% from High carbon steel wire. 70% revenue comes from India 30% from exports.
Capacity Utilisation is close to 98%. Promotors have recently increased stake in the company to 64.22% and promotor pledge is 0. Mutual funds have increased the stake to 8.62% 
In terms of Volume the company is growing consistently. >85% of the revenues were derived from customers associated with the company for >5 years. The Company is ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001:2007 certified.
Some customers in India are Apollo Tyres Ltd. • Birla Tyres Ltd. • Balakrishna Tyres Pvt. Ltd. • Bridgestone India Pvt. Ltd. • CEAT Ltd. • Continental India Pvt. Ltd. • Goodyear India Pvt. Ltd. • Hindustan Tyres • JK Tyre • MRF Limited • TVS Srichakra etc.
Current P/E is 6.7 and historical P/E Average is approx. 15. Sales growth 3Years: 20.34 %, PEG Ratio of 0.09 (The stock is very undervalued). Comfortable debt levels with Interest coverage of > 4. Profit growth 3Years: 17.56 %
The tyre sector in India & Thailand has a positive outlook, high investments in India as an export market similar is the case for Thailand. It’s not easy to get product approvals for Tyre bead wires since quality is very critical hence the company is very well positioned.
Creating a Greenfield capacity won’t be viable for new companies. It costs $1000/tonne/year for new capacity addition according to claims of Rajratan management (Almost Rs.70000 per tonne). In comparison, Rajratan is able to add the same capacity at Rs.14,000/tonne.
Rajratan shall also be developing new products, expanding to other growing markets and sourcing business from new tyre companies investing in the servicing markets. These shall be the growth drivers beyond the next couple of years.
If the company continued to deliver the same volume going ahead the share prices will normalise, hence it is a good time to enter for short term time frame (1-2 Years). Looking at valuations:
52 weeks High / Low is 396.00 / 166.00 and current market price is approx. 230.
52 weeks High / Low is 396.00 / 166.00 and current market price is approx. 230.
The stock currently looks little undervalued, there could be a little of downside but on a time frame of 1-2 years the stock should give decent returns. I want to enter the stock & would enter it soon.
Please add any points if you feel like. Let me know if any other company looks interesting, will look into the same. Also, please note the stock is not having great volumes.
And these tweets are for my conviction and my study so that i can refer them later, please do your own study and take your decision. @drprashantmish6 Please suggest if i can improve my analysis further. @vaibhavmohunta @akshaysvora
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