Firm Steel Prices Boost Maha Seamless

The stock price of Maharashtra Seamless (MSL), a B C Jindal group company, hit a 52-week high on the bourses on Thursday. On the BSE, the stock hit a high of Rs 126.50, but settled at Rs 125.75, up 2.61 per cent from its Wednesday's close. More than 6,386 shares changed hands on the counter. On the NSE, around 21,700 shares traded on the counter.

Dealers at a local brokerage house said: "The uptrend on counter is mainly due firming up of prices of steel products on good demand in the domestic market." Interestingly, the stock has appreciated 91.98 per cent from Rs 65.50 on June 6 to its current closing.

MSL manufactures carbon and alloy steel seamless pipes in technical collaboration with Mannesmann Demag, Germany. It manufactures seamless pipes and tubes by the cross-piercing elongation process.

The main application of seamless pipes are in oil exploration, boilers, ball bearings, roller bearings, automobiles, fertilisers, petrochemicals, etc. According to analysts, "the company's seamless pipes division has been the company's most profitable business segment."

MSL enjoys a dominant share in the oil and boiler sectors. It has a strong position in the pipe industry with 40 per cent market share. However, in its market segment of lower diameter and thickness it commands 60 per cent of the total market.

The company posted impressive performance for the year ended March 2002, despite a sluggish economic scenario. Net sales grew 39.3 per cent to Rs 369.8 crore while net profit improved by 43.9 per cent at Rs 46.3 crore. Had it not been for a substantial increase in tax provisioning at Rs 22.2 crore (Rs 8.2 crore), the company might have done well at net levels.