PSL manufactures and supplies spiral welded pipes conforming to American Petroleum Institute (API) standards for oil, gas and water transmission, as well as structural and piling applications for both onshore and offshore sector.
Its subsidiaries include PSL Corrosion Control Services Limited, Pipeline Systems Limited and PSL USA Inc. PSL USA, Inc. and PSL-North America, LLC.
According to sources, the conglomerate expects to establish a large share of the proposed gas pipeline network to be built by GAIL, GSPL, and other domestic players, who have announced proposals to construct pipeline transmission networks worth over Rs 20,000 crore.
PSL's annual pipe manufacturing capacity presently stands at 1,475,000 million tonnes per year.
The Promoters' shareholding stands at a very healthy 49.13% and the PE ratio is only around 8 at cmp of 179. Its Market Cap vs Sales is very attractive as compared to its peers. PSL has a market cap of 700 crs whereas the sales stand at around 3600 crs, which means Sales are around 5 times of the market cap. Now compare this with its peers like Welspun Guj whose market cap is around 4700 crs and Sales of 5800 crs, which means sales is 1.2 times market cap. Another peer Maharastra Seamless has a mkt cap of 2000 crs and sales of 2100 crs, i.e. sales is 1.05 times mkt cap. So as compared to its peers, PSL Ltd appears to be grossly undervalued.
The share is trading at a deep discount to its Highs of around Rs. 555 in December 2007. Very recently, fund house Citigroup Global Market (Mauritius) Pvt Ltd increased its stake in PSL Ltd to 5.38 per cent. The future looks very bright for this company and we can expect this stock to eventually make new highs like peer Jindal Saw is currently making.