Buy Maharashtra Seamless; target of Rs 433.60: Microsec

Microsec is bullish on Maharashtra Seamless (MSL) and has recommended buy rating on the stock with a target of Rs 433.60 in its October 6, 2012 research report.

“MSL is India’s largest manufacturers of Seamless Pipes and tubes in India for its extensive usage across various sectors viz; Oil & Gas, Hydrocarbon process, Power, Automotive etc. with its footing both in domestic as well as in overseas markets. Enhanced energy demand coupled with government reforms ensure for higher Exploration & Production (E&P) activities and shale gas discovery is going to act as a positive catalyst for the rise in demand for pipeline infrastructure in the coming years. The company produces pipes that yield higher realizations, has managed better capacity utilization rates than peers and has a cash-rich balancesheet.”

“MSL has successfully commissioned its expansion plan of the Seamless pipe plant at Mangaon which has the facility of manufacturing Drill pipes and other special grade pipes for boliers and other value added products.The commissioning of this plant facilitates the company to raise its total capacity of manufactured seamless pipes to to 5,50,000 metric tons per annum from its existing capacity of 3,50,000metric tons per annum. So far MSL has its active presence in US for exports but now the company is planning to diversify its focus towards South American and Canadian markets for aggressive exports. To aid this export expansion programme the company invested considerably for the development of R&D center with state-of-the art equipment for the delivery of world class products for international markets. The management also opines that they will be able to generate 30% of revenues from exports in the coming days.”

“We rate Maharashtra Seamless Ltd. (MSL) a buy. Our rating underpins the company’s robust business model complimented with increasing exports and other strong client base. MSL is one of the flagship company of D.P. Jindal Group specializes in providing a whole range of high-class, customizable & innovative seamless pipes and tubes. It also diversifies its foray into ERW and coated pipes,” says Microsec research report.

Non-Institutions holding more than 90% in Indian cos

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