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P e r f o r m s w e l l …
Maharashtra Seamless’ (MSL) Q2FY12 results were broadly above our
expectation primarily on the back of healthy sales volumes. The topline
came at | 577.7 crore (our estimate: | 503.2 crore), which was 41.6%
higher YoY and 20.7% higher QoQ. However, on the back of higher input
costs, the EBITDA margin declined 580 bps YoY and 170 bps QoQ to
19.6% (our estimate: 23.4%). The subsequent EBITDA stood at | 113.1
crore (our estimate: | 118.0 crore), which was 9.2% higher YoY and
10.9% QoQ. The ensuing reported PAT stood at | 81.2 crore (our estimate
| 74.7 crore), which was 1.4% higher YoY and 13.3% QoQ.
ƒ Higher operating costs lead to decline in EBITDA/tonne
Higher raw material cost has led to a decline in EBITDA/tonne of
both seamless pipes as well as ERW pipes (on a QoQ basis). The
EBITDA/tonne of seamless pipes stood at | 14322/tonne (lower by
9% QoQ and 24% YoY) while that of ERW pipes stood at |
2860/tonne (lower by 5% QoQ but higher by 15% YoY).
ƒ Order book declines on a sequential basis
The order book of the company has declined sequentially by 21% to
| 556crore at the end of Q2FY12 (| 708 crore at the end of Q1FY12).
The export to domestic mix stood at 60:40 (in Q1FY12 it was 66:34).
V a l u a t i o n
At the CMP of | 330, MSL is discounting FY12E and FY13E EV/EBITDA by
4.1x and 3.7x, respectively. Due to the sequential decline in the order
book position, we have reduced our EV/EBITDA multiple from 4.5x earlier
to 4.0x, thus arriving at our target price of | 353. We have assigned a
HOLD rating to the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P e r f o r m s w e l l …
Maharashtra Seamless’ (MSL) Q2FY12 results were broadly above our
expectation primarily on the back of healthy sales volumes. The topline
came at | 577.7 crore (our estimate: | 503.2 crore), which was 41.6%
higher YoY and 20.7% higher QoQ. However, on the back of higher input
costs, the EBITDA margin declined 580 bps YoY and 170 bps QoQ to
19.6% (our estimate: 23.4%). The subsequent EBITDA stood at | 113.1
crore (our estimate: | 118.0 crore), which was 9.2% higher YoY and
10.9% QoQ. The ensuing reported PAT stood at | 81.2 crore (our estimate
| 74.7 crore), which was 1.4% higher YoY and 13.3% QoQ.
ƒ Higher operating costs lead to decline in EBITDA/tonne
Higher raw material cost has led to a decline in EBITDA/tonne of
both seamless pipes as well as ERW pipes (on a QoQ basis). The
EBITDA/tonne of seamless pipes stood at | 14322/tonne (lower by
9% QoQ and 24% YoY) while that of ERW pipes stood at |
2860/tonne (lower by 5% QoQ but higher by 15% YoY).
ƒ Order book declines on a sequential basis
The order book of the company has declined sequentially by 21% to
| 556crore at the end of Q2FY12 (| 708 crore at the end of Q1FY12).
The export to domestic mix stood at 60:40 (in Q1FY12 it was 66:34).
V a l u a t i o n
At the CMP of | 330, MSL is discounting FY12E and FY13E EV/EBITDA by
4.1x and 3.7x, respectively. Due to the sequential decline in the order
book position, we have reduced our EV/EBITDA multiple from 4.5x earlier
to 4.0x, thus arriving at our target price of | 353. We have assigned a
HOLD rating to the stock.
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