The Hindu Business Line : New orders prop up Saw Pipes

THE stock of the leading submerged arc-welded (Saw) pipes major continued to surge on the bourses, on talk of the company bagging new orders on both export and domestic front.

The counter, which had over the last month witnessed some pressure in line with the overall weakness in the market, is gaining lost ground rapidly following the positive outlook on the company's growth trajectory.

``Pipe companies are expected to benefit immensely from the hectic pipeline laying and distribution work being done in the oil and gas sector as well as in the infrastructure projects. SPL in particular is strongly positioned to bag a major chunk of any future orders from both the public and private sectors,'' an analyst with a leading domestic brokerage said.

When contacted, Mr. Neeraj Kumar, Chief Financial Officer and Director, Finance, Saw Pipes Ltd, told Business Line that the company is a significant player in the Far East, Middle East and East African markets.

``The fact that we have all the quality and other accreditation required in place, puts us at a definite advantage. Another factor that has helped us in leveraging our export orders is that we also have in place the pre-qualification for most oil majors across the world,'' Mr Kumar said.

According to the CFO, the fact that its plant at Mudra is located near Adani port has helped the company be competitive in the international market. While not giving exact figures, Mr Kumar said that the company's current order book was good. ``We are taking of getting new orders in both the international and domestic markets. Yes, we would be a serious contender for the DUPL project for which GAIL India has raised tender. Simultaneously, we are also gearing up to make most of the new private entry players into pipeline projects,'' he added.

On the increase in steel prices, he said that while it would definitely impact margins, it would be to a limited extent as the company had taken the necessary steps to hedge itself from such raw material price increases.

``Besides, given that most of our products go to the oil and gas sector, a good part could be pass on to that segment,'' Mr Kumar said.

Going forward, he said that good finance management and a focussed marketing strategy will be the company's mantra.

``It is our tool to increase our cost competitiveness. Our steps to enter the seamless tube segment, the fact that we will also be looking to commence production at our cast iron/ ductile iron plant in 2004 and the likely boom in the large diametric pipe segment, will be the key business drivers which will help in consolidating our position in the market,'' he added.

The stock ended the day at Rs 238.85, up 4.39 per cent with around 7.6 lakh shares traded on the NSE. On the BSE, the stock ended at Rs 238.25, up 3.81 per cent with around 3.61 lakh shares traded.