Summary
Maharashtra Seamless Limited - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026 2:00 PM
Event Participants
Executives 1 Kaushal Bengani (Deputy General Manager - Investor Relations & Finance)
Analysts 4 Ankur Agrawal (Individual Investor), Niraj (Pransh Group), Radha (B&K Securities), Ritesh (Girik Capital), Tanmay Roy (Individual Investor), Vikash Singh (ICICI Securities), Yogesh Mittal (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Dispatches | 1,01,000 tons | -1.94% QoQ; management noted volume stability despite a challenging economic environment. |
| Order Book | ₹1,302 crores | Balanced mix; 33% (approx. ₹430 crores) comprised of high-margin ONGC and Oil India orders. |
| EBITDA Margin (Seamless) | ₹10,000 - ₹15,000 /ton | Range-bound; Q3 saw improvement due to reversal of previous inventory markdowns. |
| Other Income | Not Specified | Higher YoY/QoQ; boosted by market sentiment in gold, silver, and treasury operations. |
| Treasury Portfolio | ₹3,500 crores | Total liquid investment; delivered >24% returns for the 9-month period ending Dec 2025. |
| Portfolio Mix | ₹2,957 crores | Amount held specifically in mutual funds (equity/debt/liquid mix). |
| Net Cash | ~50% of Market Cap | Management maintains a cash-conservative strategy for inorganic distressed asset opportunities. |
Geographic & Segment Commentary
- Oil & Gas: This segment constitutes 33% of the current order book as of Jan 20, 2026. Management noted that while government expenditure has been muted, they have successfully replenished orders from ONGC and Oil India.
- Seamless Pipes: Margins improved this quarter due to a better product mix and the reversal of a previous inventory markdown. The sector continues to face challenges from unabated Chinese dumping, which accounts for 20-25% of the 9 lakh ton domestic market.
- ERW Pipes: Reported improved margins during the quarter driven primarily by an enhanced product mix towards higher-value applications.
Company-Specific & Strategic Commentary
- Telangana Finishing Line: The company has issued ₹90 crores in purchase orders to add 1 lakh tons of finishing capacity. This will unlock 2 lakh tons of currently unutilized production capacity by removing existing finishing bottlenecks.
- Value-Added Products: Focus remains on 4 of 5 key categories: cold drawn pipes (project completed), cylinder pipes, sour service subsea pipes, and drill pipes. Drill pipe demand is small (8k-9k tons annually) but carries high margins.
- Premium Connections: A royalty agreement with a foreign partner is in place. Production is expected to commence in approximately six months to tap into a 50k-100k ton domestic market currently served by imports and one peer.
- Inorganic Strategy: Management explicitly stated they will only acquire distressed assets at attractive valuations rather than buying at full value, citing the cyclical nature of the industry.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA per Ton | ₹10,000 - ₹15,000 | Management expects margins to remain stable in this range, with no material decline anticipated. |
| Premium Connections | Commencement in 6 months | Production start is contingent on the ongoing process following the royalty agreement. |
| Capex Execution | ₹852 crores | Total planned; current priority is the Telangana line before initiating other listed items. |
Risks & Constraints
| Risk | Context |
|---|---|
| Heavy Import Dumping | Chinese imports represent 20-25% of the domestic industry; management is maintaining margins through mix despite this pressure. |
| Government Spending | Revenue growth is highly sensitive to oil and gas sector expenditure by the government, which has recently been muted. |
| Market Cyclicality | The industry has seen multiple peer bankruptcies; MSL mitigates this by maintaining high cash reserves and avoiding high-cost acquisitions. |
Q&A Highlights
Order Book & Product Mix
- Question: What is the current mix of standard vs. value-added products and their margins? (Radha)
- Answer: We do not disclose product-wise margins. Current order book is ₹1,302 crores, with the oil sector proportion slightly increasing to 33%. (Kaushal Bengani)
Capacity Utilization
- Question: How will the Telangana project impact total capacity? (Ritesh)
- Answer: It adds 1 lakh tons of finishing capacity, not production capacity. We have 2 lakh tons of production currently unutilized due to finishing bottlenecks; this project resolves that. (Kaushal Bengani)
Capital Allocation & Dividends
- Question: With 50% of market cap in cash, why not increase dividends or distribute cash? (Ankur Agrawal)
- Answer: Dividend was quadrupled between FY22-FY24 and maintained in FY25. We prioritize long-term survival and “distressed” inorganic opportunities over short-term distribution, noting our peers’ history of bankruptcy. (Kaushal Bengani)
Treasury Operations
- Question: What is the risk profile and bifurcation of the mutual fund investments? (Niraj)
- Answer: Specific bifurcation won’t be disclosed, but the total portfolio return for the nine months is in excess of 24%. (Kaushal Bengani)
Acquisition Performance
- Question: Has the United Seamless Tubulaar acquisition played out as expected? (Yogesh Mittal)
- Answer: Yes; the mill was acquired/reactivated for ₹550 crores and generates ₹100-₹200 crores EBITDA annually. Additionally, we saved ₹375 crores in taxes by setting off losses, achieving a two-year payback. (Kaushal Bengani)
Key Takeaway
Maharashtra Seamless Limited reported a stable Q3 FY26, characterized by steady dispatches of 1,01,000 tons and a healthy order book of ₹1,302 crores. The company successfully expanded margins in the seamless segment through the reversal of inventory markdowns and improved product mix, despite persistent competition from Chinese imports. Strategically, the firm is addressing operational bottlenecks by investing ₹90 crores in a Telangana finishing line to unlock 1 lakh tons of idle capacity and is slated to enter the premium connections market by Q2 FY27. Management maintains a highly conservative capital allocation stance, holding ₹3,500 crores in liquid investments (yielding >24%) to fund potential distressed asset acquisitions. While government expenditure in the oil and gas sector remains a critical variable, the company expects to maintain EBITDA margins between ₹10,000 and ₹15,000 per ton in the near term.
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