Shree Rama Multi-Tech starts new machine as Gujarat plant runs at 90%
The micro-cap added 4.5 million tubes a month with ₹10 crore from its own cash, lifting capacity to 77 million.
What's new
- A new tubing machine is in commercial production at the Moti-Bhoyan plant, adding 4.5 million tubes per month.
- Total monthly capacity rises from 72.5 million to 77 million tubes, a 6% increase.
- The ₹10 crore investment was paid for from internal accruals, with no debt.
Why this matters
The company was already running near capacity. This 6% bump is the minimum needed to take new orders without turning business away. For a firm with a ₹596 crore market cap, a self-funded ₹10 crore spend is a real allocation of capital, not a rounding error.
What we're watching
- Whether the added capacity translates into higher sales in the next two quarters.
- If the plant can run above 90% utilisation with the expanded base.
- Any further capex plans to chase laminated-tube demand.
The full read
Shree Rama Multi-Tech has switched on a new tubing machine at its Gujarat plant, adding 4.5 million tubes per month to a base of 72.5 million. The ₹10 crore investment was paid for from internal cash. No debt. The move comes as the Moti-Bhoyan facility runs at 90% utilisation, leaving little headroom for new orders without more capacity. A 6% increase is not a step-change, but at a ₹596 crore market cap, ₹10 crore of self-funded capex is a real bet on laminated-tube demand. The open question is whether the extra tubes find buyers quickly enough to lift earnings in the quarters ahead.
Questions answered
- Why expand capacity now?
- The Moti-Bhoyan plant was running at 90% utilisation. The new machine adds 4.5 million tubes per month to meet growing demand for laminated tubes.
- How was the expansion funded?
- The ₹10 crore investment was financed entirely through internal accruals, with no mention of debt or equity dilution.
- How significant is this for the company?
- It's a 6% increase on an existing base of 72.5 million tubes per month. For a micro-cap with a ₹596 crore market value, the ₹10 crore spend is above the 1.5% materiality threshold.
- When will the expansion impact financials?
- The filing states the additional production is expected to boost sales and earnings in subsequent periods, but gives no specific timeline or revenue figure.