Maharashtra Seamless Ltd
(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.