In interaction with Dr Ramesh Chandra Mansukhani, Chairman of Man Industries India Ltd

Speaking with DSIJ, Dr Ramesh Chandra Mansukhani, Chairman of Man Industries India Ltd believes that Man Industries is better-placed in comparison to its peers when it comes to weather the current unprecedented situation & challenges to take advantage of pipe demand globally as well as in the domestic market. Following is the detailed interview:

What is your growth strategy for 2021?

We are receiving a good response in terms of orders due to the rising crude prices and the government’s boost for improving oil & gas infrastructure. Since the sector is dominated by only a few players, we are assured of a good chunk of orders from this demand uptick. Also, with the proposed investments into the ERW pipe & fitting segment, we anticipate 2021 to be a profitable year.

What is your outlook on the water sector?

The investment in water infrastructure by the government is a significant opportunity. Currently, the states have been certainly hit by the COVID-19 pandemic but post normalisation, water infrastructure will be the top agenda by most of the state governments. Nal se Jal programme under Jal Jeevan Mission aims to provide piped water connections to every household by 2024 and is the major driver for our sector. The government plans to spend Rs 3.5 lakh crore on this scheme in the next 5 years; a good part of it would trickle down to investments in large diameter pipes. Furthermore, the Indian National River Inter-link project Capex of Rs 5.6 lakh crore would also bring additional opportunities for us (with Ken-Betwa river linking, kick-starting it). All these initiatives should translate into a good business opportunity in the coming years.

How has the pandemic impacted the demand for your products?

There was an initial plant shutdown for few days in Q1FY21, but it hasn’t impacted the demand for our products. Although, due to a sharp decline in crude oil prices, there was some order slowdown from the Middle East. However, overall, the pandemic has not majorly affected us.

What is your outlook on the domestic oil & gas sector in India?

The business environment continues to remain positive. Overall, the geographies and we all are seeing good traction in the domestic as well as international business.

Oil & Gas: With Brent crude prices averaging ~$60-65 levels, we are expecting a resumption of drilling activities globally. This should create a good demand environment for us.

India's growth story: Natural gas consumption is forecast to increase at a CAGR of 4.18 per cent to 143.08 million tonnes by 2040. The Government of India is planning to invest Rs 75,000 crore to expand the gas pipeline network across the country while it is also planning to invest USD 2.86 billion in the upstream oil & gas sector to double the natural gas production. Also, in the long-term, the government aims to increase the share of natural gas in the country’s energy mix to 15 per cent by 2030 from the current 7 per cent. Factoring in the above initiatives of the government, the outlook seems rosy.

What are your growth drivers?

The current order book of Rs 1,250 crore provides near-term visibility; however, in the medium to long-term, project tendering will be a key thing to monitor. We believe, the company is better-placed in comparison to its peers when it comes to weather the current unprecedented situation & challenges to take advantage of pipe demand globally as well as in the domestic market. We also believe that with the stability in oil prices, order inflow is expected to increase both globally and in the domestic markets. Besides these, the expansion of the national grid in India and several water projects being planned in India & overseas bodes well for the line pipe industry. Also, we are intending to enter the ERW pipe segment by setting up a facility of 1,50,000 MT with an outlay of Rs 150 crore to cater to the higher demand from the city gas distribution (CGD) sector. We also intend to invest Rs 50 crore to manufacture bends & connectors along with fittings to enhance our portfolio. These new product segments should drive incremental revenue in FY22.