Business Analysis - Maharashtra Seamless Ltd.
👣Footprints
MHS is the flagship company of the D.P. Jindal Group.
Incepted in 1985, 'Maharashtra Seamless is an eminent entity indulged in manufacturing, wholesaling, and trading a huge compilation of Seamless Pipes, Carbon Steel Pipes, Hollow Section Pipes, and Welded Pipes.
MHS is the flagship company of the D.P. Jindal Group.
Incepted in 1985, 'Maharashtra Seamless is an eminent entity indulged in manufacturing, wholesaling, and trading a huge compilation of Seamless Pipes, Carbon Steel Pipes, Hollow Section Pipes, and Welded Pipes.
💚Sustainabiltiy
Leadership in domestic market provides high sustainability during the upturn in CAPEX cycle. Very difficult to dislodge clients due to high switching costs. Exports are only 25% of the company’s revenues, the scope to expand globally will ensure sustainability.
Leadership in domestic market provides high sustainability during the upturn in CAPEX cycle. Very difficult to dislodge clients due to high switching costs. Exports are only 25% of the company’s revenues, the scope to expand globally will ensure sustainability.
👨🎓Key personnels
Mr. D. P. Jindal - Chairman
Mr. Jindal has played a vital part in the company’s management since its inception. His expertise ranges across general management, strategic acquisitions, finance, steel pipes & tubes, and oil & gas exploration.
Mr. D. P. Jindal - Chairman
Mr. Jindal has played a vital part in the company’s management since its inception. His expertise ranges across general management, strategic acquisitions, finance, steel pipes & tubes, and oil & gas exploration.
Mr. Saket Jindal - MD
Mr. Saket joined the company in September 2001 and is a BBA from Boston University. He has over 2 decades of experience in managing enterprises engaged in steel pipe, non-banking finance, renewable energy, etc.
Mr. Saket Jindal is a son of Mr. DP Jindal.
Mr. Saket joined the company in September 2001 and is a BBA from Boston University. He has over 2 decades of experience in managing enterprises engaged in steel pipe, non-banking finance, renewable energy, etc.
Mr. Saket Jindal is a son of Mr. DP Jindal.
✅Business Segments
MHS primarily caters to companies in the oil & gas sector, followed by other segments, which include power plants, fertilizers, chemicals, pharmaceuticals, automobiles, and engineering.
MHS primarily caters to companies in the oil & gas sector, followed by other segments, which include power plants, fertilizers, chemicals, pharmaceuticals, automobiles, and engineering.
💼Usecase
✍️They're engaged in manufacturing seamless pipes with an installed capacity of 650,000 TPA & ERW with an installed capacity of 125,000 TPA across its manufacturing facilities at Raigad in Maharashtra.
✍️They're engaged in manufacturing seamless pipes with an installed capacity of 650,000 TPA & ERW with an installed capacity of 125,000 TPA across its manufacturing facilities at Raigad in Maharashtra.
✍️The company has a market share of 25% in the API-certified (high realization) high frequency ERW pipes segment. Moreover, with the acquisition of USTPL, the company now supplies materials for high demand oxygen cylinder pipes.
✍️It enjoys market leadership in domestic seamless pipes and has the capacity to manufacture seamless pipes market and has the capacity to manufacture seamless pipes with an outside diameter of up to 20 inches.
⚡️Product Portfolio
📹Company Corporate Video
msseamlesspipe.in
msseamlesspipe.in
💰Strong order book & Enquiries
MSL has a robust order book position breaching all-time highs for the past 4 quarters. Management expects strong demand from the export segment in FY23.
The company has received good orders from the USA, Canada, Oman, and Kuwait.
MSL has a robust order book position breaching all-time highs for the past 4 quarters. Management expects strong demand from the export segment in FY23.
The company has received good orders from the USA, Canada, Oman, and Kuwait.
🏭Industry Dynamics
(i) The global steel pipe and tubes market is valued at USD 90 billion and is projected to grow at a CAGR of 4% in the next 3 years to which the domestic market will contribute to around 9-10% of the global consumption.
(i) The global steel pipe and tubes market is valued at USD 90 billion and is projected to grow at a CAGR of 4% in the next 3 years to which the domestic market will contribute to around 9-10% of the global consumption.
(ii) Post Russia-Ukraine conflict, EU has plans to develop inter-country & cross-country imported pipelines with better RM availability coupled with the anti-dumping duty imposed by US, Canada on Chinese players provides strong tailwinds to domestic seamless pipes manufacturers.
(iii) Rig counts in US and Canada have gone up 60% and 40% respectively in the past 12 months, which is an indicator of increasing demand and a robust order pipeline.
(iv) Pipes industry is essential for the working of the global oil and gas industry and provides the most economical way to transport large quantities of oil, and natural gas over land. Current prices provide sufficient cash flows to start an investment cycle in the sector.
👥Strong Clientele
👉Key competitiors
Domestic completion from ISMT & Jindal SAW has weakened due to their leveraged b/sheets.
The only genuine competition is through imports from Japan and South Korea which are not margins dilutive.
Domestic completion from ISMT & Jindal SAW has weakened due to their leveraged b/sheets.
The only genuine competition is through imports from Japan and South Korea which are not margins dilutive.
😍Strong Guidelines
Maharashtra Seamless derives the majority of its profits from its seamless division, whose outlook remains strong, considering current energy prices and high rig counts across the globe, volumes should remain elevated for MHS, driving higher profitability.
Maharashtra Seamless derives the majority of its profits from its seamless division, whose outlook remains strong, considering current energy prices and high rig counts across the globe, volumes should remain elevated for MHS, driving higher profitability.
⚡️Competitive Advantages -
- Experienced R & D Department
- Good Financial Position & TQM
- Large Production Capacity
- Large Product Line
- Provide Customized Solutions
- Experienced R & D Department
- Good Financial Position & TQM
- Large Production Capacity
- Large Product Line
- Provide Customized Solutions
🏆Supreme Product Line -
🔸The Seamless Pipes that MSL manufactures possess the ability to withstand very high pressures and temperatures.
🔸They play a critical role in the oil exploration industry and are also in boilers used in mega power plants.
🔸The Seamless Pipes that MSL manufactures possess the ability to withstand very high pressures and temperatures.
🔸They play a critical role in the oil exploration industry and are also in boilers used in mega power plants.
🔸Seamless Pipes help transport a variety of liquids and gases over long distances.
🔸They are also used in the automobiles we drive, as well as in several defense-related projects.
🔸They are also used in the automobiles we drive, as well as in several defense-related projects.
🔸 ERW pipes manufactured by MSL are used in several general engineering & structural applications. Whether the requirement is for a few meters of pipes or for several hundreds of kilometers, MSL offers a range of products that meet the needs of its glittering list of customers.
Customer Segments :
I. Bearings
🔹MSL, is a leading manufacturer and supplier of pipes & tubes used for Bearing manufacturing units.
These products are corrosion & fire resistant, dimensionally accurate, have an excellent load-bearing capacity, and have long operational life.
I. Bearings
🔹MSL, is a leading manufacturer and supplier of pipes & tubes used for Bearing manufacturing units.
These products are corrosion & fire resistant, dimensionally accurate, have an excellent load-bearing capacity, and have long operational life.
🔹Their mills produce a wide range of bearing steel pipes which are manufactured by us from the certified and accurate raw material (Alloy Steel) as per national and international standards.
II. Oil & Gas Industry -
🔹MSL is the leading supplier of high-quality Line Pipes, OCTG, and Coated Pipes to Oil & Gas companies and their contractors in India and around the world.
🔹MSL is the leading supplier of high-quality Line Pipes, OCTG, and Coated Pipes to Oil & Gas companies and their contractors in India and around the world.
🔹Natural gases & crude oil are used as raw materials for energy, these products are completely found in different locations than it goes from the refinery process which people can use for their usage.
🔹These all products which we are using for our daily usage travel long from refineries and natural gas plants through underground pipelines because it is a safe, proficient, and economical way for these natural recourses.
III. Hydro Carbon Process
🔹MSL understands the needs of the hydrocarbon processing industry (refineries). They are the leading supplier of ERW and seamless steel tubes & pipes for petrochemical, gas-processing plants, and refineries.
🔹MSL understands the needs of the hydrocarbon processing industry (refineries). They are the leading supplier of ERW and seamless steel tubes & pipes for petrochemical, gas-processing plants, and refineries.
🔹They offer different types of tubes in low & high carbon and alloy steel for HPI applications with different dimensions (diameter from 25mm - 508mm, thickness from 1mm - 40mm.
🔹They have well-equipped laboratories for all types of physical and chemical tests.
🔹They have well-equipped laboratories for all types of physical and chemical tests.
IV. Automotive Industry -
🔹MSL delivers tubes with different applications in the automotive industry in a wider assortment.
🔹These products have huge demand from automakers across the world.
🔹Deliver the pipes and tubes at competitive rates in a stipulated time frame.
🔹MSL delivers tubes with different applications in the automotive industry in a wider assortment.
🔹These products have huge demand from automakers across the world.
🔹Deliver the pipes and tubes at competitive rates in a stipulated time frame.
V. Boiler And Heat Exchangers -
🔹MSL is the leading manufacturer and supplier of all types of boiler pipes with international standards ASTM/ASME, DIN/EN, and ISO specifications.
🔹MSL is the leading manufacturer and supplier of all types of boiler pipes with international standards ASTM/ASME, DIN/EN, and ISO specifications.
🔹Boiler tube is formally used for energy-type equipment like steam pipelines, boilers, steam superheaters etc.
🔹Heat-resisting carbon low alloyed steels are used to manufacture boiler tube which loads at high temp & pressure. Tubes are supplied as hot rolled or cold drawn.
🔹Heat-resisting carbon low alloyed steels are used to manufacture boiler tube which loads at high temp & pressure. Tubes are supplied as hot rolled or cold drawn.
VI. Plumbing, HVAC & Firefighting Industry
🔹Wide class consisting of fire fighting pipe is highly appreciated and accepted for their stable construction, unusual design features, superior abrasion resistance. They've got good lifetime and are made from superior quality steel.
🔹Wide class consisting of fire fighting pipe is highly appreciated and accepted for their stable construction, unusual design features, superior abrasion resistance. They've got good lifetime and are made from superior quality steel.
🔹Main application of HVAC is to stabilize air flow, room temperature, and humidity, which ensures that all such elements stay within acceptable limits. Operative control of all these factors minimizes the risks related to health.
🔹Galvanized pipes have got a grayish-silver exterior. They are utilized for both cold and hot plumbing household applications for many decades and for other applications as well.
VII. Structural Industry
🔹Structural pipes are present in wide range of grades & sizes so as to be utilized for a number of structural tasks.
🔹Common applications of the structural pipe include being used for sign poles, bollards, piling, columns, and structural supports.
🔹Structural pipes are present in wide range of grades & sizes so as to be utilized for a number of structural tasks.
🔹Common applications of the structural pipe include being used for sign poles, bollards, piling, columns, and structural supports.
VIII. General Engineering Industry
🔹Ensuring that every steel pipe and tubes meet the needs for which it has been installed, the selection of suitable material quality becomes very much essential. The use of the right product is required for each and every different need.
🔹Ensuring that every steel pipe and tubes meet the needs for which it has been installed, the selection of suitable material quality becomes very much essential. The use of the right product is required for each and every different need.
🔹MSL is the 1st & only manufacturer in India of Seamless pipes up to 20’’ OD
🔹 MSL is the 1st manufacturer in India of ERW pipes up to 20’’ OD
🔹They manufacture and supply pipes that are used for various mechanical engineering applications since inception.
🔹 MSL is the 1st manufacturer in India of ERW pipes up to 20’’ OD
🔹They manufacture and supply pipes that are used for various mechanical engineering applications since inception.
IX. Sewage & Waterwell Industry
🔹Most ingenious & versatile sewage pipe that is present today is made using steel.
🔹Sewage treatment involves cleaning up of water that contains industrial/human waste. Therefore, it is exposed to both continuous corrosions as well as pressure.
🔹Most ingenious & versatile sewage pipe that is present today is made using steel.
🔹Sewage treatment involves cleaning up of water that contains industrial/human waste. Therefore, it is exposed to both continuous corrosions as well as pressure.
🔹 MSL manufactures and supplies these pipes in a wide range of thicknesses and diameters, to serve all types of pressure ratings and ground conditions.
🚩Key Risk
1. The company’s operations are exposed to volatility in input prices due to the fixed price contracts it enters. Contracts are of short tenures and it builds on RM inventory after receipt of the order which helps to mitigate risks to some extent.
1. The company’s operations are exposed to volatility in input prices due to the fixed price contracts it enters. Contracts are of short tenures and it builds on RM inventory after receipt of the order which helps to mitigate risks to some extent.
2. Significant competition from international players.
Mainly South Korea and Japan.
3. Competition pulling down margins significantly.
(looks less likely)
Mainly South Korea and Japan.
3. Competition pulling down margins significantly.
(looks less likely)
4. More than 60% of company pipes dispatches are in the oil & gas sector for exploration and production (E&P) activities, which is cyclical in nature.
🧪Key Valuation Metrics -
P/E : 9.9 (Median 5 Years: 10.6)
EV/EBIDTA : 6.6 (Median 5 Years: 6.6)
Market Cap to Sales : 1
ROCE : 13%
OPM : 16-17%
P/E : 9.9 (Median 5 Years: 10.6)
EV/EBIDTA : 6.6 (Median 5 Years: 6.6)
Market Cap to Sales : 1
ROCE : 13%
OPM : 16-17%
Disclaimer -
Pointers have been taken from the company's website/ research reports and other investor forums.
This analysis is shared for learning purposes only.
Do your own due diligence before investing.
♻️RT for max reach
Pointers have been taken from the company's website/ research reports and other investor forums.
This analysis is shared for learning purposes only.
Do your own due diligence before investing.
♻️RT for max reach
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