Fundamentals

MAHARASHTRA SEAMLESS 

Ticker : 500265
BUY: Rs 448.90
Target: Rs 502 

The company is a manufacturer of seamless and ERW carbon and alloy steel pipes and tubes in India. For Q4FY18, the seamless pipes volume grew by 42 per cent YoY, while it grew by 25 per cent YoY for FY18, which has driven its topline. The EBITDA for the year grew by 38.3 per cent YoY and the EBITDA margin stood at 14.5 per cent. The PAT in FY18 surged by 36.6 per cent YoY. The government’s initiatives towards infrastructure development would trigger the demand for steel pipes, which includes seamless and ERW. The capacity utilisation levels increased in FY18 on account of anti-dumping duty levied on imports of these pipes from China. Also, the company is currently trading at attractive valuation of 15.1x P/E. Considering the robust growth in volumes, strong financial performance and attractive valuations, we recommend it as a BUY. 

GARWARE-WALL ROPES 

Ticker : 509557
BUY: Rs 1007.90
Target: Rs 1120
 

The company manufactures and sells products such as ropes, twine, yarn, fishnet, nettings and technical textiles having segments of synthetic cordage and fibre & industrial products and projects. In Q4FY18, the company’s revenue was up by 11.8 per cent YoY. The operating profit and net profit surged by 26.7 per cent and 51.6 per cent YoY, respectively. For FY18, the company declared dividend of Rs 2.5 per share. Over the last 3 years, its PAT has grown at CAGR of 46.1 per cent. Currently, the company is focusing on manufacturing innovative products. It is planning to foray into growth segments like agriculture, defence and geo-synthetics. Its exports have grown at a faster rate due to robust demand from aquaculture solutions segment and X2 ropes. Further, the growth in exports would boost the topline of the company. Considering these factors, we recommend it as a BUY.