Management Meet Update: Maharashtra Seamless Ltd - BUY - TP Rs.805 - Kotak

Key highlights

- We interacted with the management of MSL to get perspective on the company's operations-core business and United Seamless Tubular Private Limited proposed acquisition. Management is able to reassure (during the course of our interaction) that the company is well poised to benefit from the demand uptick in Seamless pipes which is expected to further flow into FY19/20.

- We believe that the company will be able to maintain margins on back of improved pricing and operating leverage. We maintain estimates; reiterate our positive view and expect company to be able to deliver PAT growth at c.55% CAGR between FY18-20.

Valuation & outlook

- MSL stock continues to trade at attractive valuations at 4x FY20 EV/EBITDA. We value MSL stock at 7x EV/EBITDA FY20E earnings and maintain BUY with unchanged target price of Rs 805 per share.

Shares of MAHARASHTRA SEAMLESS LTD. was last trading in BSE at Rs.430 as compared to the previous close of Rs. 441.25. The total number of shares traded during the day was 12381 in over 498 trades.

The stock hit an intraday high of Rs. 442.9 and intraday low of 411. The net turnover during the day was Rs. 5295959.

Source : Equity Bulls

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