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    Mah. Seamless

    MAHSEAMLES
    Capital Goods·5 Nov 2025
    Management Summary

    Maharashtra Seamless reported a challenging Q2 FY26 with significant declines in revenue, EBITDA, and PAT, primarily due to a slowdown in the oil and gas sector, persistent Chinese dumping, and a notional inventory markdown. Despite these headwinds, the company's order book grew by 20% QoQ to INR 1,378 crores, and its treasury remains robust at INR 3,115 crores. Management reiterated its focus on core business and maintaining dividends, while a key capex project in Telangana faces a delay.

    Highlights

    5
    • Order book improved by 20% from previous quarter to INR 1,378 crores.

    • Treasury stands strong at INR 3,115 crores as on 30th September '25.

    • Credit rating remains at AA+, the highest received in the past 11-12 years.

    • Dispatched 103,000 tons of seamless pipes, in line with the previous quarter.

    • One Cold Drawn pipe draw bench has commenced production, with another starting in about a week.

    Concerns

    5
    • Revenue declined by 5% QoQ to INR 1,234 crores.

    • EBITDA declined by 27% QoQ to INR 123 crores.

    • PAT declined by 44% QoQ to INR 130 crores, with EPS at INR 10 per share.

    • Margins were impacted by slowdown in oil and gas sector expenditure, continuous Chinese dumping, and a notional markdown of inventory.

    • Telangana project commissioning delayed from December 2025 to March 2026 due to vendor delays.

    What Changed1

    vs Q3 FY26

    Risks discussed4 → 5 (+1)
    Key financials

    Metrics

    6

    Periods

    2

    Headline

    5
    • Revenue
      ₹1,234 Cr
      QoQ-5%
    • EBITDA
      ₹123 Cr
      QoQ-27%
    • PAT
      ₹130 Cr
      QoQ-44%
    • EPS
      ₹10
    • Seamless Pipe Dispatches
      1,03,000 tons

    H1 FY26

    1
    • Other Income
      ₹235 Cr
      YoY+51.6%

    Order Book

    high confidence

    Total Value

    ₹ 1,378 crores

    as of 2025-09-30

    quantified
    20.0% QoQ

    Execution

    Order book visibility of 3 to 3.5 months

    Composition

    Drill Pipes(product)

    "The order book has been replenished on a quarterly basis. However, order book visibility is reduced, making it difficult to bid aggressively and forcing sales to lower-margin dealer segments to keep the mill running."

    Source:
    Prepared remarks

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    new plan — market conditions and declining margins

    Liquidity

    Cash ₹3,115 crores

    Treasury is being judiciously managed with engagement and inputs at highest levels.

    Guidance & targets

    4
    CategoryTargetPriority
    Volume
    Seamless Pipe Manufacturing
    4 lakh tons
    High
    Market Growth
    Seamless Pipe Market Growth
    2-3%
    Medium
    Margin
    EBITDA Margin per ton
    INR 8,000-15,000 per ton
    Medium
    Capex
    Telangana Project Commencement
    March 2026
    High

    Telangana project commissioning

    By end of FY26 (March 2026)
    CurrentDelayed from Dec 2025 to March 2026
    TargetCommencement of line operations

    Why it matters

    Completion of this key capex project is crucial for capacity expansion and potential new revenue streams.

    We expect the line to commence by the end of this financial year.

    How to verify

    capital_allocation.capex.fy_planned

    Risks & concerns

    5
    RiskSeverity

    Slowdown of expenditure in oil and gas sector

    The slowdown started a few quarters ago and is continuing, impacting demand for pipes and overall market growth.Management acknowledged

    high

    Continuous Chinese dumping

    Overcapacity in China leads to dumping in India, affecting both traditional and new value-added products, with existing anti-dumping duties no longer effective, leading to margin decline.Management acknowledged

    high

    Notional markdown of inventory due to falling raw material prices

    An accounting adjustment where inventory is valued at lower of cost or net realizable value, impacting reported profits but not actual cash loss, expected to reverse upon dispatch.Management acknowledged

    medium

    Reduced order book visibility and difficulty in aggressive bidding

    Order book visibility is limited to 3-3.5 months, making it difficult to forecast margins and bid aggressively, leading to sales to lower-margin dealer segments to maintain mill operations.Management acknowledged

    medium

    Delay in capital expenditure plans

    The Telangana project is delayed from December 2025 to March 2026 due to vendor delays. Overall capex plans may see further delays due to changing market conditions and declining margins.Management acknowledged

    medium

    Q&A highlights

    7

    “I'm surprised that this question is being asked by you to me when you are an industry analyst. So I'll urge you to refer to the data sources that you have because you have access to a larger database than I do.”

    Management declined to provide specific data on Chinese capacity, deferring to the analyst's own research, indicating a lack of transparency or unwillingness to share competitive intelligence.

    asked by Radha

    3 min read6 chapters

    Detailed Narrative

    01

    Q2 FY26 Financial Performance and Margin Pressures

    Maharashtra Seamless reported a challenging Q2 FY26, with revenue declining 5% QoQ to INR 1,234 crores. This led to a 27% QoQ drop in EBITDA to INR 123 crores and a 44% QoQ decline in PAT to INR 130 crores, resulting in an EPS of INR 10 per share. The margin compression was primarily attributed to a slowdown in the oil and gas sector, persistent Chinese dumping, and a notional markdown of inventory due to falling raw material prices. Management clarified that the notional markdown is an accounting adjustment expected to reverse in Q3 FY26 upon dispatch of the affected inventory.

    02

    Order Book Dynamics and Market Outlook

    The company's order book showed resilience, improving by 20% QoQ to INR 1,378 crores as of September 30, 2025. However, management noted that reduced order book visibility, typically 3 to 3.5 months, makes aggressive bidding difficult. To maintain mill operations, the company has resorted to selling more to lower-margin dealer segments. The overall seamless pipe market is experiencing slow growth of 2-3% annually, heavily dependent on the currently subdued oil and gas exploration sector.

    03

    Challenges from Chinese Dumping and Anti-Dumping Duties

    Chinese dumping remains a significant concern, with imports constituting 20-25% of the domestic market, based on India's actual production of 9 lakh tons. The existing anti-dumping duty, effective until October 2026, is no longer providing adequate protection. Furthermore, newer value-added products developed after 2016, such as cylinder pipes, sour service subsea seamless pipes, and drill pipes, are not covered by the original duty, leaving these segments vulnerable and contributing to industry-wide margin decline.

    04

    Capital Expenditure and Capacity Expansion Updates

    The Telangana project, a finishing line aimed at utilizing existing capacity, has seen INR 80 crores in purchase orders issued and INR 52 crores paid. Its commissioning has been delayed from the initial target of December 2025 to March 2026, primarily due to delays from a vendor in delivering essential machinery, rather than a lack of orders. In other capacity news, one of two new cold-drawn pipe draw benches has commenced production, with the second expected to be operational within a week, adding value-added product capabilities.

    05

    Treasury Management and Shareholder Return Philosophy

    Maharashtra Seamless maintains a robust treasury position of INR 3,115 crores as of September 30, 2025, which is managed judiciously. Management reiterated its long-standing policy of cash conservation, emphasizing that this strategy, while potentially not aligning with short-term shareholder interests, is beneficial in the long run. The company also affirmed its commitment to maintaining the dividend payout level achieved in FY25, having quadrupled dividends in previous years.

    06

    Strategic Focus and Renewable Energy Initiatives

    The company firmly stated its strategy to not diversify from its core seamless pipe business, where it holds market leadership for 35 years, believing in the long-term benefits of this focus. In renewable energy, Maharashtra Seamless currently operates 59.5 MW of capacity, generating approximately INR 60 crores in annual EBITDA. However, further expansion, such as a planned solar power plant in Telangana, is contingent on government incentives and the granting of open access permission, which is currently awaited.

    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.