ICICIdirect has downgraded Maharashtra Seamless (MSL) 'Hold' with price target of Rs 220.

"MSL reported a mixed set of numbers for Q4FY15 wherein topline came in line with our estimate while the EBITDA came in below our estimate. MSL reported net income from operations of Rs 3.64 billion for the quarter, up 4.3% QoQ and 11.6% YoY. The consequent PAT came in at Rs 301 million, up 6.1% YoY but down 13.9% QoQ," said ICICIdirect.

Commenting on the investment rationale, the stock broker said,''Going forward, on the back of a steep fall in global realisations for seamless pipes we have revised EBITDA margin estimates for FY16E to 8.4% (from 10% earlier) and for FY17E to 10.0% (from 11% earlier). We have maintained our seamless sales volumes estimate of 206250 tonnes for FY16E and 220000 tonnes for FY17E.

We have also maintained ERW sales volumes estimate of 70000 tonnes and 80000 tonnes for FY17E. We have valued the company at 6x FY17E EV/EBITDA. Hence, we have arrived at a target price of Rs 220 with a HOLD recommendation on the stock.''

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