For Q1FY17, Maharashtra Seamless reported a topline, EBIDTA and PAT below our estimate primarily on account of muted sales volume.Seamless pipes sales volume came in at ~44000 tonne (our estimate: 44688 tonne) while ERW sales volume came in at ~13500 tonne (our estimate: 18750 tonne). The total pipes sales volume came in at 57500 tonne, lower than our estimate of 63438 tonnes.Gross income from operations came in at | 317.6 crore. After adjusting for excise duty, net operating income stood at | 288.4 crore, significantly lower than our estimate of | 321.1 crore. EBITDA came in at | 29.2 crore lower than our estimate of | 37.3 crore. EBITDA margins came in at 10.1% (our estimate: 11.6%). The resulting blended EBITDA/tonne came in at | 5083/tonne (our estimate: | 5883/tonne).
Valuation : MSL reported a subdued performance for Q1FY17 on account of lowerthan-expected ERW sales volume. Going forward, we believe the imposition of anti-dumping duty augurs well for the company as it would aid in improving capacity utilisation levels for MSL. We value the company on an SOTP basis and subsequently arrive at a target price of | 215. They have a HOLD recommendation on the stock.