India: MAN Ind leverages existing capacity to drive growth, enters new product line

MAN Industries (India) Ltd, one of the largest manufacturers and exporters of LSAW and HSAW pipes in India, is entering a new product line of ERW steel pipes (6 to 8 inches in diameter, API grade) which is to be installed at its existing facility at Anjar, Gujarat with a projected capacity of 1,25,000 tonnes per annum (tpa). The estimated capex is approximately INR 150 crore. This is to serve the hydro-carbon and city gas distribution (CGD) sector and generate more revenue in the next financial year. This is expected to be commissioned by Q1 FY'23 as the company has already purchased the required machinery and equipment and construction is ongoing.

Furthermore, steel bends and other value-added products (size-18-48 inches NB) of 400-500 tonnes annually are to be installed at Anjar; at an estimated capex of INR 100 crore. This is expected to be operational by Q1 FY'23.

MAN Industries expects 10% more revenue from the water segment and 12% revenue from the oil and gas sector in the coming quarters. The margin is low in the water segment compared to the oil and gas sector but volumes are high.

At present, the company sees good potential with respect to water projects and would focus on utilising its existing capacities in Gujarat and Madhya Pradesh in order to generate higher revenue from the current set-up.

In Q2 FY'22, MAN Industries missed 10 projects owing to delay in receiving raw material because of floods in Germany. The project, worth INR 200 crore, will be executed in the coming quarter.

Other highlights:

Order book status: The company's unexecuted order book stands at INR 1,350 crore as on date with active bid book of over INR 15,000 crore. Recently, MAN Industries; received new orders worth approximately INR 350 crore to be executed in the coming 6-7 months.

Update on debt position and cash flow: The gross debt to equity as on 30 Sept'21 stands at 0.08.

Cash flow from operating activities for the period ended 30 Sept'21 stood at INR 233 crore.