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Check Before You Invest : Mahalaxmi Seamless Ltd

BSE: 513460 NSE: ISIN: INE257F01017
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does Mahalaxmi Seamless Ltd belong to?
Mahalaxmi Seamless Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is Mahalaxmi Seamless Ltd a good quality company?
Mahalaxmi Seamless Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Mahalaxmi Seamless Ltd undervalued or overvalued?
Mahalaxmi Seamless Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings - 9.02
Price to Book -9.08 -7.73
Price to Sales 2.7 2.70
EV to EBITDA 18.65 7.89
Q.4 Is Mahalaxmi Seamless Ltd a good buy now?
Mahalaxmi Seamless Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd revenue growth is 1.1% for FY-2025, which is above its 5-year CAGR of -0.11%, indicating faster growth.

Q.2 Gross Profit margin of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Gross profit margin which is the profit after deduction of direct costs, is 29.7% for FY-2025, which is below its 5-year median of 42.2%, indicating decreasing margins.

Q.3 Operating Profit Margin of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 39.17% for FY-2025, which is below its 5-year median of 45.52% indicating decreasing margins.

Q.4 Net Profit Margin of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Net Profit Margin is 13.68% for FY-2025, is below its 5-year median of 21.03%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 29.7 42.2
Operating Profit Margin (%) 39.17 45.52
Net Profit Margin (%) 13.68 21.03

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Return on Asset is 8.31%, which is in line with its 5-year historical median of 8.31%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Return on capital employed is 30.8% for FY-2025, which is above its 5-year historical median of 19.76%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Cash conversion cycle of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Cash conversion cycle is -44 days, above its 5-year historical median of -57 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

C: How much debt does the business have and is it at a sustainable level?

Q.8 Debt to Equity ratio of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Debt-to-Equity ratio is -4.22, which is lower the industry average of 0.31, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Mahalaxmi Seamless Ltd?
Mahalaxmi Seamless Ltd Debt to cash flow from operations is 5.29, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Mahalaxmi Seamless Ltd?

Q.1 Promoter shareholding and pledge status of Mahalaxmi Seamless Ltd?
Promoters hold 45.84% of the Mahalaxmi Seamless Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Mahalaxmi Seamless Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Mahalaxmi Seamless Ltd vs industry peers?
Mahalaxmi Seamless Ltd revenue CAGR is -0.11%, compared to the industry median CAGR of 7.74%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 1.1 7.7
Gross Profit Growth (%) -20.3 17.8
Operating Profit Growth (%) -2.7 12.7
Net Profit Growth (%) 0 24.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.61 1.27
ROE (%) - 8.04
ROCE (%) 30.8 11.2
Cash Conversion Cycle (days) -44.12 73

Valuation & price assessment

Q.1 Stock return of Mahalaxmi Seamless Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 12.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
12.4% 6.7% 13.8% 13.9%
Q.2 Valuation ratios of Mahalaxmi Seamless Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 9.02, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings - 9.02 17.36
Price to Book -9.08 -7.73 1.63
Price to Sales 2.7 2.70 0.74
EV to EBITDA 18.65 7.89 10.05

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