Kotak Securities' research report on Maharashtra Seamless
We interacted with the management of MSL to get a perspective on the company’s operations. Management reiterated that company is on track and would benefit from the robust orders in Seamless pipes which is expected to further flow into FY20/21. We believe that United Seamless acquisition shall be value accretive- volume contribution from United Seamless would likely negate the impact of operating margin contraction (United Seamless is in integration phase) in FY20. MSL stock is highly undervalued and is trading at attractive valuations at 4.1x FY20 EV/EBITDA.
Outlook
We value MSL stock at 7x EV/EBITDA FY20E and maintain BUY with revised target price of Rs 825 per share (Rs 805 earlier).
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