Ratnamani Metals & Tubes Ltd. (RMTL) reported a 21% YoY
growth in net sales to Rs2.5bn in Q2FY09, on back of robust
sales of its carbon steel (CS) product profile (+56% YoY at
18k mt).
Margins decline to use of high cost inventories
The use of higher cost inventory, stockpiled over previous quarters
resulted in an escalation in its bill of material for Q2FY09. Also, import
of specialised grades of stainless steel, in conjunction with the
depreciating INR resulted in material costs rising 250bps YoY to 67.2%.
This, coupled with the jump in payroll expenditure impacted margins.
Thus, OPM shrank 310bps to 18.4% in Q2FY09. As a result, growth in
op. profit in the quarter was subdued at 4% YoY to Rs466mn.

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