What Does FY25 Have In Store For Maharashtra Seamless?

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00:00 We are in conversation with Mr. Saket Jindal, Managing Director of Maharashtra Seamless.

00:05 Saket, good afternoon. Thank you so much for joining in.

00:07 You know, I just want your assessment of the quarter. Of course, we've seen

00:12 a dip in terms of revenues on a year-on-year basis, but I reckon a lot of that will have to

00:17 do with the pricing of commodities as well. Can you take us through your observations

00:21 as to what has led to the performance for this particular quarter?

00:26 Right. The performance, as you said, the top line has reduced a bit because of less exports.

00:35 And the sluggishness in export was due to the competition from other countries like Ukraine and

00:43 also increasing freight due to the Swiss Canal disturbances. So, I think the exports will pick up

00:54 in the near future. And secondly, the demand in domestic industry is still intact and the

01:05 infrastructure demand from ONGC and other downstream sectors and also from boiler segment.

01:15 So, that will be stable in the future. So, we expect to maintain the production levels and also

01:25 capitalize on the export demand in the future.

01:29 So, Saket, can you tell us about what the contribution of exports is to the total

01:35 revenue pie and going forward into FY25, assuming that there will be an improvement,

01:40 will that pie, the piece of the puzzle, increase when it comes to exports?

01:46 Right. So, I didn't get your question correctly.

01:55 We just want to know firstly, what is the contribution of exports to your overall revenue?

02:01 And can we expect the contribution of exports to increase in FY25?

02:09 Yeah, definitely it should increase because the last year was very low exports compared to the

02:14 previous year that you see. And the last year was very sluggish. So, I think we'll come back

02:20 to the previous levels at least. And this year should be much better than last year exports.

02:25 What is the contribution of your exports at the moment to your top line?

02:33 Earlier we used to maintain 25 to 30 percent, but the last year has been very low, I think

02:39 less than 10 percent. Right. You know, Saket, what I'm also observing is that we're seeing

02:44 an improvement in your margins and to a certain extent, your EBITDA per tonne for both seamless

02:51 as well as ERW have also remained largely stable. So, I reckon there is no challenge when it comes

02:57 to maintaining your operating margins. Would it be a correct assessment?

03:01 I think we can maintain the margins. It's a reasonable level. And

03:05 it's a reasonable level of margin and it's competitive and we should be able to maintain it.

03:19 Right. So, in that case, when it comes to the top line, considering there is a resolution when it

03:26 comes to shipping and of course, exports in general, what's the way forward? What kind of

03:32 overall consolidated growth can we expect for the company when it comes to the revenue going in?

03:37 I think the production levels, we can increase by 10 percent at least. So, naturally, the revenue

03:49 also will increase to that extent. And to what extent does pricing matter? Are you expecting

03:57 any big changes in the pricing environment or do you expect that to remain stable?

04:02 I think it depends on the raw material and largely the raw material should be stable.

04:08 Any fluctuation, we will adjust in our prices. Okay. And I think,

04:17 I'm assuming that if we do in fact see a change in raw material prices, an increase perhaps,

04:25 that will also be passed on in its prices accordingly, right?

04:29 That's right. Okay. In that case,

04:33 if you could give us a picture on your balance sheet at the moment, are you actually looking

04:38 to deploy funds towards capital expenditure in the upcoming year and what sort of a number,

04:45 if so, I have your earmarked for it? Yeah, there is no clear figure as of yet,

04:52 but definitely we have plans for CapEx and some of the avenues is one is premium connections for oil

05:00 and gas, high pressure application. Second is old-grown pipe and that is for smaller dia

05:10 requirements for heat exchangers and other applications. These are the two projects we plan

05:18 and also finishing facilities for line balancing so that we increase the production of our main

05:27 mill. And as we move into the new financial year, what are the areas of focus for the company?

05:35 What are the factors that investors can look forward to?

05:38 Yeah, so looking forward, we want to deploy our funds in maybe some diversified expansion

05:51 where we're looking maybe renewable project or any other acquisition opportunity which is

05:59 matching with our core competence or integrating our operations. So, we are

06:05 constantly vigilant and want to consolidate or even diversify.

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