Manaksia Steels Limited

 

CMP = 55

Manaksia Steels Limited is flagship company of the Manaksia Group. It is a multi location, Multi – Product, light Engineering Company in the field of Metal Products & Metal Formation. An ISO 9001: 2015 accredited company, major products include Cold Rolled Steel Sheets & Coils, Galvanised Steel sheets & Coil, Colour Coated Steel sheets & coils. The company has a long experience in manufacturing of Pre-Painted steel sheets / coils. 

The Company has state of-the-art manufacturing units are located in Haldia and Bankura, West Bengal, India. The company has ventured into the long steels segment in Nigeria through its step-down subsidiary (Federated Steel Mills Limited), which recycles steel scrap and manufacture steel bars used in construction with multi-year growth possibilities.

The company has following subsidiaries - with % extent of holding

Technomet International FZE United Arab Emirates - 100% 

Federated Steel Mills Limited Nigeria - 100%

Far East Steel Industries Limited Nigeria - 100%

Sumo Agrochem Limited Nigeria - 100%

Cold Rolled Coils

Cold Rolled Steel sheets / coil are produced by undergoing a series of process such as Cold Reducing, pickling, oiling, cold rolling of hot rolled coils annealing and tempering so the product has characteristics of good formability and uniform flatness. These sheets and coils are utilised in various industries, such as automobiles, home appliances, hot dipped galvanised steel and pre-painted steel products. 

This plant is an ISO 2008/9001 Certified unit and all products are as per the ISO standards. The Cold Rolled products are manufactured under all international standard like JIS 3141, BS 1449, DIN 1623, and IS 513.

Other than the above company also endeavour to supply & develop the products required by the Customers.

Manaksia Steels is a global supplier of pre-painted galvanized steel coils and sheets. Its sales footprint extends across Bhutan, Ethiopia, Liberia, Sierra Leone, Gambia, Ghana, Nigeria, Sri Lanka, Hong Kong, Indonesia, Malaysia, Singapore, Myanmar, Nepal, Philippines, South Africa, West Africa, and  UAE.

Hot Dipped Galvanised Steel

Manaksia Steels installed hot-dipped galvanising lines in the year of 2000 at Haldia and Bankura. The company specialises in producing hot-dipped galvanised steel for the building materials, automobiles, white goods, and electronic appliance industries. 

Hot Dipped Galvanised Steel Sheets / Coil a product of continuous Hot Dipping of Cold Rolled Steel Sheets in to Zinc pot, has an excellent corrosion resistance, paintability and workability due to galvanic unique behaviour of Zinc.

Hot Dipped Galvanised Steel is produced in accordance with relevant national and international standards such as JIS G 3302, ASTM A 653, IS 277 and as per specific requirement.

Pre-painted Profile Sheets

Manaksia Steels product range include Pre-Painted Sheets of various substrate material with an annual capacity of approx. 60000 MT.

The pre-painted continuous colour coated line processes various substrates including galvanised steel, aluminium zinc alloy coated steel and aluminium coils. The facility is capable of producing roofing / structural profiles such as Trapezoidal and Sinusoidal shapes.

It is an ISO 9001-2000 accredited facility and conforms to strict quality norms across all functions. The product finds wide application in Roofing, Cladding, Insulated Panels, Automotive Body Building, White Goods, Housing for Appliances and Storage Units, etc.

Investment Rationale

Manaksia Steels Limited is a multinational organisation specialises as a niche value-added steel company. The metal products and metal formation company has demonstrated an excellence in the field of light engineering. The Company is changing its DNA to graduate to value-added flat steel products, with the objective to enhance value for all stakeholders.

The Company customises metal products that are used in the housing, consumer appliances, industrial, and warehousing sectors. The Company provides superior customer service with a blend of speed and sensitivity. The company made strategic investments in state-of-the-art technology enabled plant (automated equipment, enhancing asset utilisation, efficiency, consistency and profitability). The company is focused on  addressing an increasing demand coming out from India’s housing and infrastructure sectors.

The company customises across sizes, variants and combinations, marketed under the trusted ‘5 Star’ brand. The galvanised corrugated sheets are branded as ‘5 Star Super Shakti’ the colour coating sheets and coils enjoy a distinctive recall around the ‘5 Star Super Colour’ brand.

MSL is currently in the process of debottlenecking its production facilities to enhance the capacity utilisation and expansion upto 150,000 TPA. When operated at full capacity, the enhanced facility could generate a potential revenue of Rs 1,300 Cr . Even after this capacity expansion the company is likely to have approximately Rs 75 Cr on its books, which is an adequate buffer to address increased working capital.

The company has proposed Rs 80 Crore investment in new product line called Aluzinc with a production capacity of 96,000 MTPA. The company is already in process to commission Aluzinc unit at the Haldia plant. With the completion this unit, the overall capacity utilisation is expected to increase from FY25 onwards. The project is being executed in two phases, the first of which is expected to be completed by Q3FY25.

The company intends to double its production capacity, enhance the proportion of value-added products, deepen its terrain presence and address wider customers. This decisive investment is expected to graduate the company to the next level, marked by sustainable growth, larger surplus, critical mass and enhanced stakeholder value. 

Experienced promoters

MSL is promoted by Suresh Kumar Agrawal and family with experience of about four decades in steel manufacturing industry. Varun Agrawal (son of S. K. Agrawal) looks after the company’s day-to-day affairs and the support of experienced professionals.

Strategic location of the plant

The strategic location of the company in Haldia provides strategic benefits in manufacturing steel products, freight cost constitutes a significant portion as large amount of bulky raw material is required to be sourced to the manufacturing site. The company needs to procure HR coils and Zinc from both domestic and overseas supplier. The plant’s proximity to Haldia port area enhances its ability to import raw materials easily and it helps the company to save the time and logistics cost. This advantage reinforces the ability to cost-effectively source materials for production, strengthening competitiveness.

The company has manufacturing facilities in India and Nigeria. It is a prominent supplier across India and abroad. The products of the company are marketed across West Bengal, Bihar, Uttar Pradesh, Bhutan, and Assam. Its international sales footprint extends across Bhutan, Ethiopia, Liberia, Sierra Leone, Gambia, Ghana, Nigeria, Sri Lanka, and UAE.

The Company installed a solar captive power plant with a 1MW capacity. The company has increased the colour coating capacity from 150 tonnes per day to 200 tonnes per day  and it intends to enhance solar power plant capacity by another 1 MW. The company  plans to start a new galvanising line to address growing demand, facilitating a larger output of colour coating sheets. 

The company has wide distribution network. Its products are delivered to consumers through a network of about 85 distributors and 450 retailers. The company has a 10% market share of colour coated sheets and a 15% market share of galvanised sheets, both from among secondary flat steel manufacturers in the respective area of operation.

Conclusion

Manaksia Steels  has  niche value-added steel products. The company specialised in the area of light engineering. The company customises metal products for use in the housing, consumer appliance, industrial and warehousing sectors. 

Manaksia Steels has patiently enhanced its manufacturing capacity, invested out of accruals, focused on a geographic region and strengthened the portfolio mix. Now the time has come for the company to make its big move. Manaksia Steels is well positioned to maximise value for all its stakeholders in a sustainable way.

Manaksia Steels Limited stock at cmp Rs 55 is excellent investment opportunity for both short term and long term. It can be bought within 20% from cmp with 10 %  allocation.