Skip to content

    Mah. Seamless

    MAHSEAMLES
    Capital Goods·31 Jul 2025
    Management Summary

    Maharashtra Seamless reported a challenging Q1 FY26 with an 11% revenue decline to Rs. 1,303 crores and a 41% EBITDA drop to Rs. 165 crores compared to Q4 FY25. This was primarily due to a significant slowdown in order booking, exacerbated by Chinese dumping and reduced expenditure in the oil and gas sector. Despite these operational headwinds, the company maintained a strong treasury of Rs. 2,919 crores and a high credit rating of AA+, with PAT decline cushioned by treasury performance.

    Highlights

    5
    • Treasury at Rs. 2,919 crores as on 30th June 2025, judiciously managed.

    • Credit rating upgraded from AA to AA+ in the previous calendar year, highest rating received.

    • Dividend quadrupled in FY24 from FY22 levels, maintained in FY25 despite profitability decline.

    • Almost 1,03,000 tons of seamless pipes dispatched in Q1 FY26.

    • Telangana project has issued purchase orders of Rs. 80 crores and expensed Rs. 46 crores, with production expected by January 2026.

    Concerns

    6
    • Revenue declined 11% to Rs. 1,303 crores in Q1 FY26 vs Q4 FY25.

    • EBITDA declined 41% to Rs. 165 crores in Q1 FY26 vs Q4 FY25.

    • PAT declined 4% to Rs. 234 crores in Q1 FY26 vs Q4 FY25.

    • Marked slowdown in order booking, attributed to Chinese dumping and reduced expenditure in oil and gas sector.

    • Margins and EBITDA per ton have declined due to increased Chinese dumping and slowdown in O&G sector.

    • September quarter is likely to be muted on the margin front.

    What Changed2

    vs Q2 FY26

    Guidance items4 → 5 (+1)Risks discussed5 → 4 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹1,303 Cr-11%QoQ
    2. 02EBITDA₹165 Cr-41%QoQ
    3. 03PAT₹234 Cr-4%QoQ
    4. 04EPS₹17
    5. 05Other Income₹160 Cr

    Order Book

    high confidence

    Total Value

    ₹ 1,149 crores

    as of 2025-07-31

    quantified

    Composition

    Oil and Gas(sector)
    70.0%
    Drill pipes(product)
    ₹ 27 crores

    Cancellations / Deferrals

    • deferred:Slowdown in tender issuance and actual ordering from ONGC and Oil India.

    "Order book has seen a significant decline quarter-on-quarter due to slower tender issuance and reduced expenditure in the oil and gas sector, compounded by Chinese dumping."

    Source:
    Prepared remarks

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹46 crores this quarter · ₹852 crores (FY26) planned

    Implied internal accruals given cash-rich status

    Liquidity

    Cash ₹2,919 crores

    Treasury breakdown: Bonds Rs. 514 cr, Corporate deposits Rs. 20 cr, Mutual funds Rs. 2,339 cr, Fixed deposits Rs. 4 cr, Cash Rs. 42 cr.

    Guidance & targets

    5
    CategoryTargetPriority
    Order Book
    Order Book Value
    at least Rs. 1,500 crores
    High
    Capacity
    Telangana Plant Production Start
    some production by January 2026
    High
    Volume
    Cold Drawn Pipes Dispatches
    improvement in quantity dispatched
    High
    Volume
    Total Tonnage
    similar level of tonnage that was achieved last year
    Medium
    Profitability
    EBITDA per ton
    not higher than current levels
    High

    Cold Drawn Pipes Dispatch Volume

    From December quarter onwards.
    CurrentMachines received, one installing in August, second by September.
    TargetImprovement in quantity dispatched.

    Why it matters

    Indicates progress on new projects and potential revenue contribution from value-added products.

    On the cold drawn pipes project front, we have received the machines which we had ordered and we are installing one of the machines in August and the second machine should also get installed by September. We should see an improvement in the quantity of cold drawn pipes dispatched from December quarter onwards.

    How to verify

    key_financials.metrics[label='Volume - Cold Drawn Pipes']

    Risks & concerns

    4
    RiskSeverity

    Slowdown in Order Booking

    Marked slowdown in order booking, leading to revenue and EBITDA decline, attributed to Chinese dumping and reduced O&G expenditure.Management acknowledged

    medium

    Chinese Dumping

    Increased dumping from China is impacting sales realization and margins, especially for value-added products like cylinder pipes.Management acknowledged

    medium

    Reduced Oil & Gas Sector Expenditure

    Slowdown in expenditure in the oil and gas sector is directly impacting tender issuance and demand for pipes.Management acknowledged

    medium

    Obsolescence of Plant & Machinery

    Company's plant and machinery is old, posing a risk of obsolescence, which is why cash is being conserved for future technology replacement.Management acknowledged

    low

    Q&A highlights

    8

    “The reason for decline in margin is attributed to fall in realization. Reason for fall in realization is increased dumping from China and slowdown in oil and gas sector regarding the level of expenditure that is taking place. On the cash deployment front, we are continuing with our finishing line project in Telangana and the cold drawn pipes project in Maharashtra.”

    Analyst challenged management on operational performance and capital allocation, leading to detailed explanations of market conditions and project progress.

    asked by Chetan Doshi

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY26 Performance Overview and Market Headwinds

    Maharashtra Seamless reported a challenging Q1 FY26, with revenue declining 11% to Rs. 1,303 crores and EBITDA dropping 41% to Rs. 165 crores compared to Q4 FY25. PAT also saw a 4% decline to Rs. 234 crores, though this was cushioned by Rs. 160 crores in other income from treasury performance. The company dispatched approximately 1,03,000 tons of seamless pipes during the quarter, but faced a marked slowdown in order booking due to increased Chinese dumping and reduced expenditure in the oil and gas sector.

    02

    Order Book Dynamics and Future Outlook

    The company's order book stands at Rs. 1,149 crores, representing a decline of Rs. 400 crores quarter-on-quarter, a level not seen in the past 12 quarters. This slowdown is primarily attributed to slower tender issuance from the oil and gas sector, which accounts for 70% of dispatches, and competitive pressure from Chinese dumping. Management aims to restore the order book to at least Rs. 1,500 crores by the end of September, requiring substantial new orders in the coming two months. Margins and EBITDA per ton have declined, and the September quarter is expected to remain muted on the margin front.

    03

    Capital Expenditure and Project Progress

    Maharashtra Seamless is actively pursuing its Rs. 852 crores capital expenditure plan. For the Telangana finishing line project, Rs. 80 crores in purchase orders have been issued, with Rs. 46 crores expensed against a total budget of Rs. 184 crores, with production expected to commence by January 2026. The cold drawn pipes project has received necessary machines, with installations scheduled for August and September, anticipating improved dispatches from the December quarter. However, the Rs. 350 crores hot mill upgrade has not yet been initiated.

    04

    Robust Treasury Management and Shareholder Value

    The company maintains a strong treasury of Rs. 2,919 crores as of June 30, 2025, strategically managed across various instruments including bonds (Rs. 514 crores), corporate deposits (Rs. 20 crores), mutual funds (Rs. 2,339 crores), fixed deposits (Rs. 4 crores), and cash (Rs. 42 crores). Management emphasized the judicious management of this treasury and its role in cushioning PAT. The company has also quadrupled dividends in FY24 from FY22 levels and maintained them in FY25, while continuously evaluating inorganic growth opportunities, though none have met their criteria to date.

    05

    Addressing Chinese Dumping and Raw Material Trends

    To counter the impact of Chinese dumping, the company is preparing data for the renewal of anti-dumping duties in October 2026, aiming to expand coverage to include products like cylinder pipes. Raw material prices experienced a decline of Rs. 2,500-Rs. 4,000 per ton during the quarter, which influenced sales realization. Management noted that while domestic projects are not directly impacted by Chinese dumping, the overall slowdown in O&G expenditure affects demand regardless.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.