MAHSEAMLES - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.0

Maharashtra Seamless Ltd is financially sound with strong profitability, zero debt, and attractive valuation. However, short-term technical weakness and a high PEG ratio temper its growth outlook.

📊 Financial Overview

• Revenue: ₹5,263 Cr (TTM) — stable performance in steel pipes and tubes segment

  Value Research

• Profitability: PAT of ₹234 Cr this quarter, slightly down from ₹243 Cr
• Margins: ROCE at 17.2% and ROE at 13.4% — solid capital efficiency
• Debt Profile: Debt-to-equity ratio of 0.00 — completely debt-free
• EPS: ₹66.5 — supports strong earnings base

📈 Valuation Metrics

• P/E Ratio: 8.54 — significantly below industry average of 24.0
• P/B Ratio: ~1.2 — undervalued relative to book value ₹468

  Value Research

• PEG Ratio: 2.30 — indicates valuation may be stretched relative to growth
• Intrinsic Value: Estimated around ₹600–₹650 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: Leading manufacturer of seamless and ERW pipes for oil, gas, and infrastructure
• Moat: Strong domestic market share and export presence
• Growth Drivers: Infrastructure push and energy sector demand

📌 Entry Zone Recommendation

• Suggested Entry: ₹560–₹580 — near 52-week low and RSI oversold zone
• Technical Indicators: RSI at 37.2 (oversold), MACD negative — short-term weakness

📈 Long-Term Holding Guidance

• Strong fundamentals and zero debt make it a reliable long-term hold
• Monitor PEG ratio and quarterly earnings for sustained growth signals

✅ Positive

• Debt-free balance sheet
• Strong ROCE and ROE
• Undervalued on P/E and P/B basis
• EPS supports earnings strength

⚠️ Limitation

• High PEG ratio (2.30) suggests valuation may be ahead of growth
• Decline in FII and DII holdings
• MACD and RSI indicate short-term bearish trend

📰 Company Negative News

• FY25 earnings missed analyst expectations despite strong quarterly profit

  Simply Wall St

🌟 Company Positive News

• TTM net profit of ₹879 Cr and revenue of ₹5,263 Cr — solid performance

  Value Research

• Dividend yield of 1.76% maintained amid earnings volatility

🏭 Industry

• Industry P/E at 24.0 — Maharashtra Seamless trades at a discount
• Steel pipes sector benefits from infrastructure and energy investments

🧾 Conclusion

• Maharashtra Seamless is a fundamentally strong, undervalued stock with zero debt and solid returns
• Ideal for long-term accumulation near support zones; short-term caution advised due to technical indicators

Sources

Value Research

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Simply Wall St

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Stock Analysis