Ma­ha­rash­tra Seam­less Ltd

Money Times - - Techno Funda - By Nayan Pa­tel

(BSE Code: 500265) (CMP: Rs.514.55) (FV: Rs.5)

In­cor­po­rated in 1988, Ma­ha­rash­tra Seam­less Lim­ited (MSL) man­u­fac­tures steel pipes and tubes. It op­er­ates through two seg­ments: (i) Steel Pipes and Tubes; and (ii) Power - Elec­tric­ity. It of­fers elec­tric re­sis­tance weld­ing (ERW) pipes in­clud­ing mild steel (MS) and gal­va­nized pipes con­form­ing to Amer­i­can Pe­tro­leum In­sti­tute (API) spec­i­fi­ca­tions; seam­less pipes such as hot fin­ished pipes and tubes, cold drawn tubes and boiler tubes; coated pipes in­clud­ing three layer poly­eth­yl­ene coat­ing, fu­sion bonded epoxy coat­ing, in­ter­nal coat­ing and three layer polypropy­lene and pipe fit­tings. Its plant has a ca­pac­ity to pro­duce 550,000 TPA of car­bon and al­loy steel hot fin­ished and cold fin­ished seam­less pipes with sizes rang­ing from 10.3 mil­lime­ters (mm) to 508 mm. Its ERW pipes man­u­fac­tur­ing plant can pro­duce 2,00,000 TPA of pipes. It has a 7 MW wind power plant and a 11 MW so­lar power gen­er­at­ing plant in Ma­ha­rash­tra be­sides a 25 MW so­lar power plant in Ra­jasthan ag­gre­gat­ing 43 MW of re­newal en­ergy re­source. MSL has an eq­uity base of just Rs.33.5 crore sup­ported by re­serves of around Rs.3078.23 crore. The pro­mot­ers hold 61.78% while the in­vest­ing pub­lic holds 38.22% stake in the com­pany.

MSL re­ported ro­bust num­bers for H1FY19. For H1FY19, it re­ported 165% higher PAT of Rs.188.84 crore on 36% higher sales of Rs.1310.26 crore fetch­ing an EPS of Rs.28.19. Dur­ing Q2FY19, it re­ported 160% higher PAT of Rs.88.49 crore on Sales 702.83 482.69 1310.26 962.40

46% higher sales of Rs.702.83 crore fetch­ing an EPS of PBT 135.65 54.26 293.58 112.57

Rs.13.21. It paid 120% div­i­dend for FY18. Tax 47.16 20.28 104.74 41.34

At the CMP, the stock trades at P/E of 10.9x. MSL re­ceived PAT 88.49 33.98 188.84 71.23

Rs.920 crore worth or­ders from ONGC on 3 De­cem­ber 2018. EPS (Rs.) 13.21 5.07 28.19 10.63

Based on its fi­nan­cial and per­for­mance pa­ram­e­ters, the MSL share looks quite at­trac­tive at the cur­rent level. In­vestors can buy this stock with a stop loss of Rs.465. On the up­per side, it could zoom to Rs.625-650 lev­els in the medium-to­long term.

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