Hold Maharashtra Seamless, target Rs 180: ICICIdirect.com
ICICIdirect.com has recommended a hold rating on Maharashtra Seamless with a price target of Rs 180 in its April 28, 2009 research report.
“Maharashtra Seamless (MSL) performance for Q4FY09 was in line with our expectations in terms of top line while the bottom line was slightly above estimates on lower raw material costs. The top line grew at 43% YoY whereas the bottom line grew at 19.6% YoY on lower EBITDA margins. The slowdown in the capex in the oil & gas sector has led to the decline in order book position to Rs 501 crore. MSL reported 43% YoY growth in sales to Rs 549.6 crore in Q4FY09 on higher realisations of the seamless pipes segment.
“MSL reported an EBITDA of Rs 102 crore in Q4FY09 against Rs 75.1 crore in Q4FY08. The EBITDA margins declined 90bps YoY to 18.6% in Q4FY09. The net profit of MSL grew 19.6% YoY to Rs 64.6 crore in Q4FY09 as against 54.1 crore in Q4FY08. We rate the stock as a HOLD with a price target of Rs 180, 4x earnings of FY11E and 70% of the expected cash balance of Rs 82 per share in FY09,” says ICICIdirect.com’s research report.
Tags: Hold Maharashtra Seamless, ICICIdirect, Maharashtra Seamless
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