Your Stock Queries
4/18/2013 9:00 PM Thursday
I am holding 250 shares of Maharashtra Seamless, purchased at Rs 200 per share. Should I continue to hold them or book profit?
- Deven Gupta, Via Email
|BSE/NSE Code ||500265/MAHASEAMLES |
|Face Value ||Rs 5 |
|CMP ||Rs 237 |
|52-Week high/low ||Rs 399/Rs 199 |
|Current Profit/(Loss) ||18.50 per cent |
This looks like the right time for you to have raised a question about your shares in Maharashtra Seamless. Let us first take a look at what business the company is into.
Maharashtra Seamless, a subsidiary of the D P Jindal group engages in the manufacture and sale of seamless pipes and tubes primarily in India. These seamless pipes and tubes have applications in the oil and gas, automotive, hydrocarbon processes, as also in bearing, hydraulic cylinder, boiler, heat exchanger, super heater and condenser to name a few. The company also manufactures and sells ERW pipes for applications in the fields of natural gas or oil, diesel, drinking water, and sewage/water treatment. In addition, it is involved in the generation of electricity through a wind power generation plant.
The company has seen some sort of disappointment as far as the financial numbers are concerned for the recently concluded third quarter of FY13. The topline witnessed a decline of 36.58 per cent on a YoY basis for Q3FY13 to stand at Rs 391.62 crore as against Rs 617.47 crore for Q3FY12. On the other hand, the bottomline too witnessed a decline of 64.94 per cent on a YoY basis to stand at Rs 28.40 crore for Q3FY13 as against Rs 81.01 crore for Q3FY12. If we look at the results carefully, we find that the topline and the bottomline have been on a southward journey since the last four consecutive quarters. On the valuation front, the company discounts its trailing twelve-month earnings by 7.55x and the EV/EBITDA stands at 3.52x. Although the valuations look attractive and the company is virtually debt free, some concerns remains on its performance. At this juncture, we feel that you are sitting on a considerable amount of profits. Therefore we suggest you to book profit in the counter.
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