This iron & steel products stock has zoomed 50% thus far in October

On October 8, 2021, Maharashtra Seamless had announced that the company has successfully bagged an order worth Rs 237 crore from ONGC for supply of seamless casings pipes

Shares Maharashtra Seamless rallied 10 per cent to hit an over two-year high of Rs 47 in intra-day trade on Wednesday. With today's gain, the scrip has soared 50 per cent in the first nine trading days of October. The stock of the iron and steel products company was quoting at its highest level since May 2019.

On October 8, 2021, Maharashtra Seamless announced that the company has successfully bagged an order worth Rs 237 crore from Oil and Natural Gas Corporation Limited (ONGC) for the supply of seamless casings pipes.

The company primarily caters to companies in the Oil & Gas sector, where it is a registered vendor for major domestic oil producers and refiners. In addition, it also caters to other segments, including power plants, boilers, automobile engineering etc. For the upstream oil & gas sector, involved in exploration and production, the demand outlook looks stable.

The company has an upstream exposure of 30 per cent and mid and downstream exposure of 70 per cent. In addition, 50 per cent of the industry mix is coming from oil & gas. The company's focus on newer products should help it in retaining and improving the market share, Maharashtra Seamless said in its FY21 annual report.

With the development of the renewable power portfolio across Maharashtra and Rajasthan, the company has been able to meet its green energy requirements. The company’s capacity share in the domestic seamless pipe market stands enhanced further with the acquisition of United Seamless Tubulaar Private Limited (USTPL). With the addition of USTPL, it has added to its revenue and profitability through the introduction of new products like the oxygen cylinder pipes which should cater to the lack of supply for the high demand products, it added.

The demand for Seamless and ERW pipes which got impacted in 2020 due to pandemic is back on track in 2021 riding on decent planned government expenditure, corporates being bullish on the economic recovery and with the opening of international borders for trade, exports are seeing an upside and increasing trend in the steel prices coming to help, the company said.