MAN Industries (India) Limited, a major large diameter pipe manufacturing company with an installed capacity of 1 mn t, is foraying into the API grade electric resistance welded (ERW) steel pipes segment in a bid to serve the hydrocarbon and city gas distribution (CGD) sectors. Working towards this end, the company is setting up a new line to be installed at the existing facility in Gujarat’s Anjar. The total installed capacity will be 125,000 t and the estimated capex is pegged at around INR 150 crore. The new line is expected to be operational by May ’22.
1.Q4 PAT rises 107%-The company posted a 107% year-on-year fourth quarter growth in profit after tax (PAT)-to INR 25.9 crore, against INR 12.5 crore seen in the same quarter last fiscal.
PAT for FY ’21 stood at INR 100.9 crore, a growth of 82% y-o-y.
2.Registers 17% y-o-y revenue growth in Q4-The company’s total income for the quarter stands at INR 557.30 crore, up 17% y-o-y compared to INR 6,70.90 crore in the year-ago period. Meanwhile, the consolidated total income in FY ’21 stood at INR 211 crore, marking a growth of 19% y-o-y compared to FY ‘20.
3.Reports EBITDA at INR 58.9 crore in Q4-The EBITDA Q4 for the quarter has grown by 24% y-o-y to INR 58.9 crore against INR 47.4 crore in Q4 FY ’21. Meanwhile, The EBITDA for FY ’21 stood at INR 235.8 crore, up 28% y-o-y with an EBITDA margin of 11.2%.
4.Strong order growth trajectory in Q4 FY ’21-The unexecuted order book as on 31st Mar ’21 stood at approximately at INR 1,800 crore, to be executed in the current financial year. The company continues to have a robust book of outstanding orders for more than INR 12,000 crore at various stages of evaluation for several oil, gas and water projects in India and abroad. The company therefore expects good order inflow in near future.
5.Enters ERW steel pipe segment-MAN Industries, with an installed capacity of 1 mn t, is foraying into the API grade ERW steel pipe segment. In order to serve the hydrocarbon and CGD sectors, the company is setting up a new line to be installed at the existing facility in Gujarat’s Anjar. The total installed capacity will be at 125,000 t and the estimated capex is pegged at approximately INR 150 crore. The new line is expected to be operational by May ’22.
6.Divestment of non-core business activity and demerger-Disinvestment of equity in the subsidiary, Merino Shelter Pvt. Ltd, which is engaged in real estate development, has been approved by the board of directors. Also, the company has approached the Bombay High Court requesting to give directions to (MIPL) to issue and allot equity shares to the list of shareholders.
7.Opportunities in the oil and gas sector-The company sees opportunities in the oil and gas sector on account of higher oil prices and increasing drilling activities globally. “The government’s aim to increase the share of natural gas in the country’s energy mix to 15% by 2030 and making India a gas-based economy will provide ample opportunities for steel pipes manufacturers like us. We see traction in the oil and gas industry domestically and globally”, said Dr.R.C.Mansukhani, Chairman, MAN Industries (India) Limited.
8.Water infra projects in the pipeline-The company also sees huge opportunities in this space on account of several The government initiatives. These include:
- Allocation of INR 50,000 crore in Union Budget 2021-22 has allocated INR 50,000 crore for the Jal Jeevan Mission.
- Total scope size of opportunities in large diameter steel pipes in water infrastructure is estimated at INR 1,40,000 crore in the Jal Jeevan Mission and INR 1,12,000 crore in the National River Linking Scheme.
Outlook-
The company sees global demand for steel pipes and tubes increasing at a CAGR of 6.2% from $142.4 in 2014 to $230.4 in 2027.
The company is looking at a topline of INR 800-1,100 crore and EBITDA of about 10-12% on the ERW capex. Also, it is planning 15,000-20,000 t capacity expansion of its seamless pipe plant in 2023-2024. It expects the EBITDA/t margins to increase from the current 10-12% to 14-15% in the next three years.
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