Steel Stock Surges 8% as Promoters Plan to Raise Stake by 7%
Steel Stock Surges : Steel stocks witnessed a remarkable 8% surge after Maharashtra Seamless Ltd (MSL) announced its promoters’ plan to increase their stake by 7%. This strategic move has significantly boosted investor confidence, as it indicates the promoters’ strong belief in the company’s future prospects. Additionally, expectations of robust volume growth in the upcoming fiscal year have further fueled bullish sentiment around the stock.
Stock Performance and Price Movement
During Thursday’s trading session, shares of Maharashtra Seamless Ltd (MSL) soared to an intra-day high of ₹657 per share, marking an 8% increase from the previous closing price of ₹608.20. However, the stock later settled at ₹640.50. Over the past five years, MSL has delivered an impressive return of over 270%, making it a lucrative investment choice for long-term investors.
Stake Increase and Growth Projections
Maharashtra Seamless Ltd., a leading player in the seamless steel pipes industry, has projected a 7-8% volume growth for the upcoming fiscal year (FY25). The company currently boasts an order book worth ₹1,600 crore, with expectations of securing a substantial contract in the oil and gas sector by March 2025.
The key highlight driving investor enthusiasm is the promoters’ decision to increase their stake in MSL. The current holding stands at 68%, but the promoters plan to raise it to 75% by December 2025. This move underscores their confidence in the company’s financial strength and growth potential.
Additionally, MSL’s stainless steel division is expected to perform exceptionally well, with projected volumes of 4.35 lakh tonnes for FY25. The EBITDA per tonne for this segment is estimated to be ₹16,500, signaling robust profitability.
Diverse Manufacturing Capabilities
MSL has a strong presence in the steel industry, manufacturing a wide range of seamless and electric resistance welded (ERW) pipes. The company specializes in:
✅ Seamless Pipes & Tubes: Hot-finished pipes, cold-drawn tubes, boiler tubes, and oil country tubular goods (OCTG).
✅ ERW Pipes: Mild steel and galvanized pipes, API line pipes.
✅ Coated Pipes: Three-layer polyethylene and fusion-bonded epoxy coatings.
✅ Pipe Fittings: Various industrial applications.
Apart from its core steel business, MSL has diversified into renewable energy, investing in wind and solar power projects to optimize costs and leverage government incentives.
Financial Performance in Q3 FY24
MSL’s financials for the quarter ending December 2024 showed a slight decline in revenue and profitability:
📉 Revenue from Operations: ₹1,408 crore (-2% YoY)
📉 Profit After Tax (PAT): ₹186 crore (-33% YoY)
Despite the decline, the company maintains a strong balance sheet and remains debt-free, which strengthens its position in the industry.
Key Financial Ratios
| Metric | Value |
|---|---|
| Market Cap | ₹8,654 Cr |
| Current Price | ₹646 |
| 52-Week High/Low | ₹987 / ₹563 |
| Stock P/E | 11.5 |
| Book Value | ₹444 |
| Dividend Yield | 1.55% |
| ROCE (Return on Capital Employed) | 22.9% |
| ROE (Return on Equity) | 18.1% |
| Face Value | ₹5.00 |
| Promoter Holding | 68.1% |
| Debt-to-Equity Ratio | 0.00 |
| Price-to-Earnings (P/E) | 11.5 |
| Pledged Shares | 0.00% |
| QoQ Profit Variation | -15.5% |
| YoY Profit Variation | -32.6% |
| Industry P/E | 16.3 |
| Graham Number | ₹749 |
| Intrinsic Value | ₹614 |
| RSI (Relative Strength Index) | 54.6 |
| EPS (Earnings Per Share) | ₹56.3 |
| No. of Equity Shares | 13.4 Cr |
| PEG Ratio | 0.44 |
| 200 DMA | ₹675 |
| Free Cash Flow (3 Years) | ₹1,626 Cr |
| Free Cash Flow (Latest Year) | ₹1,009 Cr |
These financial indicators showcase the company’s strong fundamentals, making it an attractive investment.
Company Profile: Maharashtra Seamless Ltd.
Founded in 1988, Maharashtra Seamless Ltd. is India’s largest manufacturer of seamless and ERW pipes. A part of the D.P. Jindal Group, the company is a key supplier to oil & gas, power, infrastructure, and automotive industries.
Its commitment to quality and innovation has positioned MSL as a leader in the steel industry, with a growing international presence.
Conclusion: A Strong Investment Opportunity?
With its promoters increasing their stake, robust order book, and anticipated growth in FY25, Maharashtra Seamless Ltd. stands out as a promising investment. Despite recent profit declines, its strong balance sheet, zero debt, and diversified operations make it an appealing choice for long-term investors.
The stake increase signals confidence, and if the company successfully secures its upcoming contracts, MSL could see further stock price appreciation. Investors should keep an eye on future earnings reports and order book developments to gauge the company’s trajectory.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.