Rama Steel Tubes shares rise over 59% this week; here’s why?

The stock has surged over 59% since Monday from its closing price of ₹10.37 apiece last Friday. Shares of Rama Steel Tubes are on a gaining spree after the company entered into a partnership with Onix Renewable Ltd earlier this week.

In a filing to the stock exchanges on September 4, Rama Steel Tubes Ltd said that it has partnered with Onix Renewable Ltd to provide steel structures along with single-axis trackers for solar projects undertaken by Onix Renewable Ltd. The company mentioned that it might also provide dual-axis trackers in the future as a part of the collaboration.

Rama Steel Tubes Ltd said that it has developed specialised steel structures and tracker tubes for Onix Renwable’s Greenfield Solar Projects. Richi Bansal, the Whole Time Director of the company and Chief Executive Officer, projected that the collaboration will have a positive impact on the company’s earnings before interest, taxes, depreciation and amortisation (EBITA) and will establish its presence in the renewable energy sector.

The company also mentioned that the reliability and lifespan of solar projects are heavily dependent on the quality and durability of the steel structures, which are critical for ensuring the long-term success and efficiency of such projects.

Rama Steel Tubes’ consolidated revenue from operations decreased nearly 31% to ₹216.63 crore in the June quarter of FY25 against ₹312.51 crore in the June quarter of FY24. The company’s revenue from operations for the June quarter of FY25 decreased over 19% from ₹268.26 crore in the March quarter of FY24.

Rama Steel Tubes’ consolidated profit-after-tax (PAT) for Q1FY25 declined nearly 17% to ₹6.19 crore compared to ₹7.45 crore in the corresponding quarter of the preceding fiscal. Sequentially the company’s PAT also declined more than 18% from ₹7.6 crore in the March quarter of FY24.

Rama Steel Tubes shares closed at ₹16.64 apiece, up 19.97%, on the NSE.