ICICIdirect.com has recommended hold rating on Maharashtra Seamless with a target of Rs 378, in its August 12, 2011 research report....
“Maharashtra Seamless (MSL) Q1FY12 results came in lower than our expectation. Net sales were inline with our estimate at Rs 478.5 crores (I direct estimate of Rs 478 crore) which was up by ~20% YoY and sequentially down by ~13%. Improvement in sale is mainly due to higher sales volume and realizations which was up by ~15%YoY and ~11% YoY respectively. However if we consider sequential performance the volumes as well as realizations have dipped by ~4% and ~35 respectively. EBITDA has taken a hit due to higher raw material cost and no positive contribution from inventory gains. Thus leading to decline in EBITDA Margins by 320 bps YoY and 450 bps QoQ. Profitability of the company has been impacted (down by ~29% YoY and ~21%QoQ to ~Rs 71 crore) due to decline in other income (down by 73% YoY). In Q1FY11 company had liquidated its investment in mutual funds which had led to other income being significantly high.”
“Due to higher raw material cost the EBITDA/tonne on ERW pipes witnessed a sharp dip of ~50% both YoY and QoQ to Rs 3016/tonne whereas seamless pipes declined by 14% QoQ, whereas it registered a marginal increase of 1% YoY to Rs 15786/tonne. Due to strong demand for pipes the order book of the company rose by 35% to Rs708 crore at the end of Q1FY12 (Rs 523 crore at end of Q4FY11). The export to domestic mix has improved from 45:54 (in Q4FY11) to 66:33.”
“At CMP of Rs 350, MSL discounts FY12E and FY13E EV/ EBITDA by 4.6x and 4.1x respectively. Due to improvement in the order book visibility we raise our EV/EBITDA multiple from 4x to 4.5x and thus arrive at our target price of Rs 378/share, thus maintaining our HOLD rating,” says ICICIdirect.com research report.
“Maharashtra Seamless (MSL) Q1FY12 results came in lower than our expectation. Net sales were inline with our estimate at Rs 478.5 crores (I direct estimate of Rs 478 crore) which was up by ~20% YoY and sequentially down by ~13%. Improvement in sale is mainly due to higher sales volume and realizations which was up by ~15%YoY and ~11% YoY respectively. However if we consider sequential performance the volumes as well as realizations have dipped by ~4% and ~35 respectively. EBITDA has taken a hit due to higher raw material cost and no positive contribution from inventory gains. Thus leading to decline in EBITDA Margins by 320 bps YoY and 450 bps QoQ. Profitability of the company has been impacted (down by ~29% YoY and ~21%QoQ to ~Rs 71 crore) due to decline in other income (down by 73% YoY). In Q1FY11 company had liquidated its investment in mutual funds which had led to other income being significantly high.”
“Due to higher raw material cost the EBITDA/tonne on ERW pipes witnessed a sharp dip of ~50% both YoY and QoQ to Rs 3016/tonne whereas seamless pipes declined by 14% QoQ, whereas it registered a marginal increase of 1% YoY to Rs 15786/tonne. Due to strong demand for pipes the order book of the company rose by 35% to Rs708 crore at the end of Q1FY12 (Rs 523 crore at end of Q4FY11). The export to domestic mix has improved from 45:54 (in Q4FY11) to 66:33.”
“At CMP of Rs 350, MSL discounts FY12E and FY13E EV/ EBITDA by 4.6x and 4.1x respectively. Due to improvement in the order book visibility we raise our EV/EBITDA multiple from 4x to 4.5x and thus arrive at our target price of Rs 378/share, thus maintaining our HOLD rating,” says ICICIdirect.com research report.
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