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The company has reported a impressive performance on all the key parameters on back of healthy order book in Q1 as water application pipes & Water & Oil and Gas , segments reported growth in Top line/EBIDTA and PAT on YoY basis however on QoQ basis the Revenue/EBITDA de-grew. Revenue for the quarter stood at Rs.7.4bn vs Rs.5.88bn (+52.7%/-7.6%). EBIDTA for the quarter down by 19.4% YoY to Rs.378mn and margin came at 5% (-451bps YoY/-216bps QoQ). Adj. PAT grew by 69.9% YoY and -21.1% QoQ to Rs.191 mn vs CEBPL Est. of Rs.247mn. As on date total order book stood at Rs.40bn of which ERW share in order book is around Rs.400cr.

* Management expect revenue to grow by 20% plus over previous year to Rs 36bn to Rs.38bn and EBIDTA margin to be in the range of around 10% in FY25, post expansion expect margin to be around 13%. Q1 EBIDTA was weaker due to higher raw materials cost. Next year tonnage is expected to increase by 25% from current year production of 3.5mn tonnage.

* ERW Business Projects Strong Capacity Growth by FY26: The ERW capex has been completed, and operations began in March 2024, with a projected capacity of 275,000 tonnes by FY26. The ERW business is expected to utilize 40% capacity in FY25 and 60-70% in FY26. Currently, ERW pipe margins stand at 6-7%, with revenue of ?50 crore and an EBITDA loss of ?1 crore for 1QFY25. The ERW order book is valued at ?400 crore, contributing 10% to the total order book. Revenue for the ERW segment is anticipated to reach ?250-300 crore for FY25 and ?500-600 crore for FY26, with export orders expected to yield higher margins.

* Foray into Hydrogen Pipes: Man Industries Ltd is the first company in India who got clearance certification in the European market. Hydrogen pipes certification clearance is 3 steps process, and the company cleared its last step a month ago. Management is confident to get the first mover advantage in the Hydrogen pipes. Also working on putting a new line for ERW lines, going forward it is expected to contribute around 15-20%. The company has received small inquiries for hydrogen and has started bidding in this segment, marking it as a new line of business.

* Order Book and Execution: The current order book stands at ?40 billion, with plans for execution over the next 6 to 12 months, and an additional ?1,850 crore order is set for execution within the next 12 to 18 months. Going forward, 80% of the orders are expected to be exports and 20% domestic. ERW orders contribute ?400 crore, representing 10% of the total order book for this year. Of the remaining ?3,600 crore, 80% is allocated to oil and gas, and 20% to water projects. The bid book is valued between ?8,000 to ?10,000 crore, with the same 80% export and 20% domestic split. The overall order and bid book currently maintain a 20% domestic and 80% export distribution.

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* MAN industries is on the cusp of witnessing healthy Revenue/PAT growth of 29/47% CAGR over FY24- 26. Further its upcoming new facility in Jammu and Saudi, which is a high RoCE plant is likely to improve the overall profitability of MAN industries (improvement in margin by 150+bps over FY24-FY26. We like to maintain our OUTPERFORM rating on the stock led by 1) expanding in to ERW pipes and seamless steel pipes (high realization 3-4x of existing product), 2) expanding capacity for Steel Bends & Connectors and expectation of cash inflow from Marino shelter real estate projects. We ascribe a rating of OUTPERFORM with a TP of Rs. 546 (16x of FY26 EPS).

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