Maharashtra Seamless (500265) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 earnings and revenue declined significantly both quarter-on-quarter and year-on-year due to lower dispatches, reduced sales realization from increased competition and Chinese dumping, a preventive maintenance shutdown at a key mill, and inventory markdowns from falling raw material prices.

• PAT for Q1 FY25 stood at Rs. 136 crore, down from Rs. 223 crore in Q4 FY24 and Rs. 216 crore in Q1 FY24.

• The affected mill resumed production at the start of Q2 FY25, and normalization of dispatches is expected in the second quarter.

• Maintained strong market share: 55% in seamless pipes and 18% in API-certified ERW pipes.

• Board approved unaudited consolidated and standalone financial results for the quarter ended 30th June 2024.

Financial highlights

• Revenue for Q1 FY25 was Rs. 1,216 crore, down from Rs. 1,259 crore in Q4 FY24 and Rs. 1,256 crore in Q1 FY24; consolidated revenue was ₹1,150.98 crore.

• EBITDA for Q1 FY25 was Rs. 276 crore with a margin of 23%, while consolidated EBITDA margin was approximately 14.2%.

• PAT and EPS dropped to Rs. 136 crore and Rs. 10 per share, respectively; consolidated net profit after tax was ₹128.84 crore.

• Treasury/net cash position stood at Rs. 2,203 crore as of June 30, 2024, with zero net debt.

• Standalone EBITDA margin for Q1 FY25 was approximately 14.3%.

Outlook and guidance

• Dispatches and earnings are expected to normalize in Q2 FY25 as the affected mill resumes operations and high-value orders are executed.

• Order book as of July 2024 stands at Rs. 1,812 crore, supported by back-to-back raw material bookings to lock margins.

• No new debt required for planned capital expenditure and working capital; all to be funded from internal accruals.

• No volume growth is expected in FY25; volume growth anticipated only after Telangana finishing line is completed, likely in FY26.

• Management does not expect a significant further fall in selling prices; reversal of inventory markdown is anticipated as orders are dispatched.