Dr. R. C. Mansukhani, Chairman, MAN Industries (India) Limited

  • India Infoline News Service |
  • 16 Dec, 2022 |
  • 10:09 AM
  • In conversation with Sheetal Agarwal of IIFL, the management shares the company's expansion plans, macro opportunities and strategic priorities.

Please provide an overview of your company's business model.
Incorporated in 1988, MAN Industries (India) Limited is one of the largest manufacturers and exporters of large diameter carbon steel line pipes in India. The company engages in bidding for various oil and gas and water projects across the world and produces high-quality corrosion protective applications required in on-shore and off-shore oil and gas pipelines. In the last three decades, the company has manufactured and supplied more than 13,000 Kms of line pipes across the world for various applications. The line pipes are used for oil & gas transmission, oil exploration & refining and water & sewage transportation.

What are the macro opportunities for the company?
There are various government initiatives for the smooth production and sustaining of the steel manufacturing industry such as National Gas Grid, Nal Se Jal, Jal Shakti Abhiyaan, River linking, AMRUT and Namami Gange programs that helps in increasing the demand for saw pipes.

What benefits are you getting from the Har Ghar Nal Se Jal Scheme in your business?
We are a world-class manufacturer of line pipes and coating systems and our business largely caters to the oil & gas sector as well as water supply sector which is also our priority and water sector orders are also increasing. In terms of the water projects, Har Ghar, Nal Se Jal Scheme contributes 10% to 20% of our order book. We intend to increase this stake and be more aggressive in this segment considering its growing demand after streamlining the finance aspect with the state government. 

What is the company's current order book? How is the order pipeline shaping up?
Our unexecuted order book is approximately Rs. 800 crore. This is to be executed in the next 5-6 months and the company also has a bid book of approximately Rs. 15,000 crore.

What are your growth strategies for the next 3 years?
Our goal and aspiration for the next three years is to achieve a revenue CAGR of 18%-20% on the back of better utilization of existing facilities and the addition of new products. We also aim to improve EBITDA margins from the current levels. We also plan to undertake CAPEX for new product launches and robust growth.
Furthermore, I am delighted to share that the work on our ERW steel pipes project implementation is on track and is developing well as per the revised schedule. Along with this, our plans to enter the stainless steel business have also been progressing well. In this regard, the orders for major critical equipment have already been placed and the work is going on in full swing.
Project orders and execution timelines:

ERW Pipes1,25,000 MTPATo serve the hydro-carbon and CGD sectorApprox. Rs. 170 croreExpected to be completed by Q4 FY23
Steel Bends & Connectors/ Crossovers5,000-6,000 bends p.a.To serve the hydrocarbon sector and enable increase product basketApprox. Rs. 75 croreExpected to be completed by Q3 FY23
Stainless Steel Pipes20,000 MTPATo serve the defense, Hydrocarbon, fertilizer, dairy, chemicals, etc sectorApprox. Rs. 470 croreExpected to be completed by Q3/Q4 FY24


Share your views on the water, oil and gas sectors.
We believe that the steel pipe industry is expected to grow substantially in the domestic and global markets with stability in oil prices and order inflow. Besides this, the expansion of the National Gas Grid in India and several other planned water projects strengthens the growth of the steel line pipe industry. Additionally, the government initiative of Har Ghar, Nal Se Jal Scheme with an allocation of Rs. 60,000 crore to provide piped drinking water to 3.8 crore households by 2024 will further boost the steel pipe manufacturing sector in water transportation.

Help us understand the risk of commodity prices on your business. How are you managing this risk?
As per the nature of our business, we focus on continuously bagging the steel pipe contracts and undertaking their execution across oil & gas and water project segments. We enter into back-to-back contracts with steel mills which minimize the impact of commodity price volatility. Furthermore, all commodity prices have softened, which will help our profitability in the coming quarters.

Share with us a snapshot of your company's financial performance and the strengths thereof.
During Q2FY23, we registered a consolidated total income of Rs. 4670.6 million with an EBITDA of Rs. 153 million and a loss of Rs. 51 million. The quarter could have been better, had it not been for the impact on account of abnormal fluctuations in foreign exchange that the company faced. And, due to the delays in the arrival of the imported raw material, there was a delay in starting one of the projects/orders. This has further affected the top line and bottom line in the quarter, which we strongly believe will be recovered in the coming quarters, as the order book of the company remains strong.


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