Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue improved by 14% compared to Q1 FY '25, reaching INR 1,291 crores.
- EBITDA increased by 83% to INR 231 crores, indicating strong operational performance.
- PAT and EPS increased by 65% to INR 224 crores and INR 16.42 per share, respectively.
- The company's treasury has improved significantly, standing at INR 2,387 crores, generating substantial returns.
- The order book remains robust at INR 1,700 crores, reflecting strong demand in the manufacturing and oil and gas sectors.
Negative Points
- Fluctuations in EBITDA per tonne due to varying product mix and raw material costs.
- Challenges in the export market due to price competitiveness and potential antidumping duties.
- ERW Pipes utilization levels have declined, impacting overall production efficiency.
- Working capital has increased due to higher debtor levels, affecting cash flow management.
- The company faces ongoing challenges from Chinese imports, impacting domestic market share.
Q & A Highlights
Q: What factors contribute to the fluctuation in EBITDA per tonne, and how are changes in raw material costs passed on to customers?
A: The fluctuation in EBITDA was more pronounced in Q1 due to specific factors discussed in previous calls. The guidance of INR 15,000 per tonne is on a blended basis, and H1 EBITDA per tonne was INR 14,159, aligning with guidance. For raw material costs, inventory is booked against orders to lock margins and mitigate price fluctuations. - Kaushal Bengani, Deputy General Manager, Investor Relations and Finance
Q: What percentage of seamless pipes demand in India is fulfilled by domestic production versus imports?
A: The majority of seamless pipes consumption in India is fulfilled by domestic manufacturers, with a small portion imported from China. The exact percentage is not specified but is estimated to be around 80-90%. - Kaushal Bengani, Deputy General Manager, Investor Relations and Finance
Q: What is the current status of the debottlenecking at the Telangana plant, and what is the CapEx plan?
A: Orders have been placed, and work is ongoing at the site. The commissioning is expected by December 2025. The CapEx plan is detailed in the presentation, with INR 852 crore planned for various projects. - Kaushal Bengani, Deputy General Manager, Investor Relations and Finance
Q: How does Maharashtra Seamless plan to address the issue of imports affecting the industry, particularly from China?
A: The company is working on addressing the issue of imports, particularly from China, which affects the industry. Specific actions are not disclosed due to confidentiality, but efforts are ongoing as it impacts the company significantly as a market leader. - Kaushal Bengani, Deputy General Manager, Investor Relations and Finance
Q: What are the future projections for volume growth and capacity utilization?
A: For FY '25, volume is expected to be flat at around 4 lakh tonnes. For FY '26, volume will be slightly higher as the Telangana finishing line becomes active. Capacity utilization is expected to remain in the range of 65% to 80%, depending on production mix. - Kaushal Bengani, Deputy General Manager, Investor Relations and Finance
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
