Pick of the Week: Man Industries

Man Industries

BSE Code (513269), CMP: 30

Target: 36 to 38 IN SHORT TERM

Man industry Ltd is the flagship company of the Man Group, UK and is involved in manufacturing and supply of steel pipes for high and medium pressure applications such as Oil, Gas, Petrochemical and water and transportation and Anti Corrosion Coating systems. Man also manufactures large diameter LSAW and HSAW pipes at its plants in Pithampur and Anjar. These pipes contribute 50 percent each to the companys revenue. The Man Group has a track record of over 32 Years as a successful trading organization and now over 16 Years as an ambitious and fast growing manufacturer of Aluminum Extrusion Products and Large Dia. Line Pipes. With strategic investments and continuous growth, Man Industries (India) Ltd. has emerged out as a prominent player in the league of world-class manufacturers of Line Pipe and Coating Systems in a short span of eight years of its entry into the Global market. The group under the leadership of Mr. R C Mansukhani and Mr. J C Mansukhani is committed to quality products and also treasures its employees who make it happen. Its vast organizational strength comprises of dedicated and skilled teammates whose core competence lies in making a good products, a better one.

Rationale for Investment :- Beneficiary of huge investments planned in Oil & Gas sector Huge investments are being planned by oil and gas industry worldwide especially in the hydrocarbons exploration and production activities as oil prices continue to rise. An estimated 235000 km of pipeline projects are being planned globally of which an estimated 34 percent is likely to be from Middle East and Asia. Domestically, GAIL itself has announced plans to add 8000 km of pipeline network. This will definitely lead to an increased demand for SAW pipes.


Timely and balanced capacity expansion: - The Company currently has an installed capacity of 500000 tonne and 300000 tonne of LSAW and HSAW pipes respectively. It recently commissioned 200000 tonne capacity of HSAW pipes in September 2007and is in the process of setting up another 200000 tonne capacity by March 2008. This will take total capacity of SAW pipes to 1 million tone; equally divided between LSAW and HSAW pipes which provides additional stability to company�s business. Moreover this capacity expansion comes at an opportune time and will enable the company to benefit from huge demand growth for pipes.


Strong order book lends visibility: - The company currently has an order book of Rs2000 crore which is almost twice its FY2007 revenue. On an increased capacity base, this order book lends revenue visibility of over 1 to 1.5 years. Sales and NP for year ended 07-08 were 1446.8 Cr & 71.2 Cr. Sales and NP for latest Quarter 456.6 Cr & 2.7 Cr. On YOY basis NP has increased by 29% Dividend during year ended 07-08 was 30%