Industries like chemical, engineering, fertilizers, pharmaceuticals, power, food processing, paper, and oil & gas employ Venus Pipes’ products extensively. Its ongoing expansion, according to brokerage Antique Stock Broking, would double its capacity to 33.6 ktpa and include 9.6 ktpa of backward integration (piercing line for making hollow pipe from stainless steel round bar).
Venus’ single manufacturing facility, in Kutch, Gujarat, close to Kandla, has a total cumulative production capacity of 12 ktpa (3.6 ktpa seamless pipe and 8.4 ktpa welded pipe) (55 km). Port in Mundra (75 kilometers).
“We expect stronger margins to be supported by backward integration activities, while rising domestic and foreign sales are projected to drive Venus’ top line growth. We commence coverage with a BUY rating and a target price of $1,037 on Friday because we like the growth prospects and the manageable leverage levels (we anticipate them to increase to 0.5x level of FY25E net debt EBITDA).
Shares of Venus Pipes made their debut on the stock market in May of last year, and since being listed on stock exchanges after their initial public offering, they have gained over 119%, providing multibagger profits (IPO). There is a potential increase of more than 40% from the present stock levels from the issue price of 326 per share, which is currently hovering around 729. The share price is close to its all-time high 774 it hit in Nov 2022.
The Gujarat-based business is an expanding producer and exporter of stainless steel pipes and tubes in India. The business provides its products under the Venus brand name for use in a variety of industries, including oil and gas, chemical, engineering, fertilizers, pharmaceuticals, power, food processing, paper, and engineering.
The views and recommendations given above are those of individual analysts or broking companies and not of o2help.
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