RPEL exports to 31 countries, including the UAE, Turkey, Greece, Israel, Italy, Hungary, Germany, Poland, France, Spain, the Netherlands, the US, Austria and Sweden. It has more than 138 customers and a significant export presence, with 60-65 per cent of export revenues. RPEL meets the quality requirements and standards of various countries, including ANSI & ASME (USA), DIN (Germany), BS (UK), AFNOR (France), UNI (Italy), and ISO (International).

 Next move

RPEL now focusses on completing its capital expenditure plans to move ahead with value-added products, with increased margins. To support this plan, the company completed its initial public offering (IPO) in September 2023. The IPO included a fresh issue of 13,800,000 shares, valued at Rs135.24 crore, and an offer for sale of 3,040,000 shares, worth Rs29.79 crore, bringing the total issue size to Rs165.03 crore. With a market capitalisation of about Rs570 crore, the share now trades in the range of Rs113.35-117.18. The stock hit a 52-week high at Rs154 and a 52-week low at Rs98.

RPEL intends to expand its portfolio of stainless-steel washers by adding circlips to the product line. Today, it offers over 2,500 SKUs of stainless-steel washers to its customers. The products include inner ring washers, spring washers, nord lock washers, retaining rings, internal tooth washers, and external tooth washers of various sizes and specifications. The wide range of products enables them to meet customer demands and efficiently compete with their competitors.

Industry experts believe that stainless steel manufacturing is a fragmented industry in India, with small and mid-size players dominating the market. Easy availability of raw materials, no intellectual property for production processes, and no brand loyalty have made this industry attractive for small and mid-size players. Some notable competitors include Panchdeep Metal Corp, Jyoti Steel India and Jindal Stainless Steelway.

“Stainless steel is a commodity business; so, cheaper prices attract more sales, though margins are compromised,” informs Sarthak Sarat, analyst, ValuePickr Research. “For other products manufactured by the company, such as washers and roofing hooks, the competition is regional and mid-sized players. For stainless steel pipes and tubes, the competition includes Jindal Saw, one of the biggest players in India, which controls the market by influencing prices and government decisions for import restrictions.”

RPEL is also betting big on the growing demand for high-margin specialised fasteners used in pillars supporting bullet train tracks. The company has already supplied 3 kg U-bolts, a critical piece of equipment, for the Ahmedabad-Mumbai Bullet Train project. The pillars are currently under construction. These fasteners are high-strength products made with advanced metallurgy to hold the rails of bullet trains under high speed, vibrations, and heat generated. 

“The government’s proposed plan to augment bullet train infrastructure in the North, South, and Eastern parts of the country is likely to benefit companies like us, who make precision products customised to meet the specifications of high-speed bullet trains,” elaborates Sanghvi. “The U-bolts have been designed to meet project specifications with safety as our top priority. The U-bolts need to function smoothly under high speed, vibrations, and heat generated due to the movement of such trains, and we have paid special attention to this while designing our products,” he adds.

Sanghvi has ambitious plans to secure orders from the defence sector, railways and the aerospace industry for its pipes division and has already initiated its capital expenditure plan. 

For the financial year ended March 2024, the company has reported a 23.94 per cent increase in net profit at Rs31.04 crore, underscoring its strong performance and strategic growth initiatives. Revenue increased to Rs602.40 crore, reflecting a solid increase of 25.20 per cent year-on-year. The EBIDTA grew by 21.23 per cent to Rs57.04 crore in 2023-24.

“The demand for stainless steel products, particularly precision products, is steadily rising in the domestic market, especially for bullet trains, railways, road transportation, defence, and the aerospace industry,” Sanghavi sums up. “We expect our order book to remain strong moving forward and margins to improve substantially in the next two to three years, backed by high-margin value-added products”.