Broker’s call: Man Industries (Outperform)

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Target: ₹390

CMP: ₹285.20

Man Industries (India) Ltd was incorporated in 1988 and is the flagship company of the Man Group promoted by the Mansukhani family. Today, the company is one of the largest manufacturer and exporter of large diameter carbon steel line pipes, which are used for various high pressure transmission applications for oil & gas industry, petrochemicals, water, dredging & fertilizers, hydro-carbon and CGD Sector.

MAN industries is in the cusp of expanding the product portfolio to ERW & SS pipes along with HSAW/LSAW pipes. However, margin for the ERW pipes are lower than HSAW and LASW due to competitive scenario and low labor depended and most of the process is automated. ERW plant at Anjar is expected to start commercial production from Q3FY24.

Further its upcoming new facility in Jammu, which is high RoCE plant is likely to improve the overall profitability of MAN industries.

We initiate coverage on the stock with Outperform rating led by expanding in to ERW pipes and seamless steel pipes (high realisation 3-4x of existing product), expanding capacity for Steel Bends & Connectors and healthy revenue/PAT growth at CAGR of 27/40 per cent over FY23-26.