ESAB India - Encouraging quarter; growth in focus | Company Update
18 Dec 2025
Blog
We retain Buy on ESAB India with TP revised upwards to Rs 6,850 (vs Rs 6,554 earlier) on valuation rollover. The company delivered a strong quarter, with overall growth hinting at signs of recovery supported by margin gains. ESAB continues to outperform, underscoring its superior execution, premium product mix, and leadership in high-end equipment. With a net cash balance sheet, strong return ratios, and supportive industry fundamentals, the company looks poised for a sustained recovery. We have made no changes to our estimates; factoring in revenue/EBITDA/PAT CAGR at 13%/14%/14% over FY25-FY28E.
ESAB India Ltd. Stock Price Chart
Strong performance in a cyclically weak quarter:
Q2FY26 revenue up 12.7% YoY and 8.4% QoQ to Rs 3,816 mn, marking a solid recovery after a few subdued quarters. EBITDA rose 17.5% YoY and 22.1% QoQ to Rs 722mn, with margins improving to 18.9% (vs 18.2% LY and 16.8% LQ), possibly driven by improved operating leverage and better cost control. PAT surged 83.5% YoY / 93.5% QoQ to Rs 792mn, aided by a one-time gain of Rs 309mn from the land sale in West Bengal. The company remains net cash positive with a stable cash cycle of 43 days and strong return ratios (ROE at 54.4% vs 51.6% LY).
Growth stronger to its peer:
ESAB’s revenue growth was stronger at 12.7% YoY versus Ador Welding’s modest 4.4%, though Ador reported sharp PAT growth on the back of improved operating profits. We believe Ador’s significant margin expansion (12% vs. 7% YoY) was due to a combination of steel price correction, favorable product mix, and cost control. However, ESAB’s superior 18.9% EBITDA margin reflects its premium product mix, operational discipline, and leadership in high-end equipment and automation. Overall, ESAB continues to exhibit stronger topline momentum, higher operating leverage, and margin resilience, making it our preferred pick in the welding space.
Supporting fundamentals:
Rising per capita steel consumption and a potential pick-up in private capex should bode well for ESAB. The company’s resilient Q2 performance, after a few muted quarters, suggests improving demand and volume traction. Supported by its strong execution and exceptional return ratios (ROE/ROCE of 54%/70%), ESAB remains well-positioned to sustain steady growth and margin leadership.
Valuation and view:
We retain our Buy rating and raise Target Price to Rs 6,850 due to valuation rollover. Our target price is arrived at by applying an unchanged 45.0x P/E and 30.0.0x EV/EBITDA to September 2027E EPS and EBITDA. Key risks: (i) economic downturn derailing growth, and (ii) increase in competition affecting product prices and margins.
Company website: https://esab.com/
| Rating | BUY |
|---|---|
| CMP | INR 5,248 |
| Target Price | INR 6,850 |
| Upside | 31% |
Click to download the full ESAB India Ltd. Company Update
Analyst:
- Mohit Surana - Senior Research Analyst, Institutional Equities (NISM-202300189881)
- Mohd Haris - Research Associate, Institutional Equities (NISM-202400161268)
Frequently Asked Questions (FAQ)
1. What is the current rating and target price for ESAB India?
ESAB India has a BUY rating with a revised target price of Rs 6,850, reflecting a potential upside of 31% from the current market price of Rs 5,248.
2. Why was the target price revised upward?
The target price was revised upward primarily due to valuation rollover, while the company’s growth estimates remain unchanged.
3. How did ESAB India perform in Q2FY26?
In Q2FY26, ESAB India reported revenue growth of 12.7% YoY and 8.4% QoQ to Rs 3,816 mn. EBITDA increased 17.5% YoY to Rs 722 mn, with margins improving to 18.9%.
4. What factors supported margin improvement during the quarter?
Margin improvement was supported by better operating leverage, improved cost control, and a premium product mix.
5. Why did PAT increase sharply in Q2FY26?
PAT rose significantly due to a combination of improved operating performance and a one-time gain of Rs 309 mn from the sale of land in West Bengal.
6. What is ESAB India’s balance sheet position?
The company remains net cash positive, with a stable cash cycle of 43 days and strong return ratios.
7. How does ESAB India compare with peers?
ESAB India delivered stronger revenue growth compared to Ador Welding and maintained a higher EBITDA margin, reflecting its premium product mix and leadership in high-end equipment.
8. What industry factors support ESAB India’s outlook?
Rising per capita steel consumption and a potential pick-up in private capital expenditure are expected to support demand for welding equipment and solutions.
9. What growth assumptions are used in the valuation?
The valuation factors in a revenue, EBITDA, and PAT CAGR of 13%, 14%, and 14% respectively over FY25–FY28E.
10. How is the target price valuation derived?
The target price is derived by applying valuation multiples of 45.0x P/E and 30.0x EV/EBITDA to September 2027E earnings and EBITDA.
11. What are the key risks highlighted for ESAB India?
Key risks include a potential economic downturn affecting demand and increased competition that could pressure product pricing and margins.
Disclaimer: - You are advised to read our disclaimer here: https://www.mnclgroup.com/disclaimers
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Rashi Peripherals Ltd: Stellar quarter - Company Update
We retain "BUY" rating and raise our target price to Rs. 610 (vs Rs 505 earlier). Rashi reported topline growth of 42.6% YoY in a seasonally weak quarter, on the back of strong sales volume & prices across PES segment (56% of revenue) and LIT (44...
Triveni Turbine: Worst likely behind, recovery pending - Company update
We upgrade our rating on Triveni Turbine to BUY, supported by improving execution visibility and a gradual recovery in order inflows. While new applications such as CO₂-based energy storage, MVR, and turbine servicing are likely to be incrementally...
The Anup Engineering: Through the Trough, Recovery in the offing - Company Update
We upgrade our rating on The Anup Engineering to BUY (previously HOLD) and revise our target price to Rs 2,515. The company is not yet out of the woods, with the market awaiting clear signs of a recovery in order inflows. That said, we believe the wo...
Saksoft Ltd: Temporary headwinds, normalization in sight - Company Update
We maintain our "BUY" rating with a revised target price of Rs 285 (vs 325). Saksoft delivered weak results – a) topline growth saw a de-growth of 3% despite the favourable currency mix, b) Top 2 clients have cut spends in Q3, the pain co...
Mayur Uniquoters: Riding export momentum - Company Update
We maintain our BUY rating on Mayur Uniquoters with a revised target price of Rs. 825 (earlier Rs. 770), as we roll forward our valuation to Q3 FY28E and upgrade our FY27E/FY28E earnings estimates by ~4%. The company delivered a robust operating perf...
Scoda Tubes Ltd.: Slight miss; structural thesis intact - Company Update
We retain BUY rating on Scoda Tubes but upward revise target price of Rs 250 (previously Rs 240). Increase in target price is mainly due to valuation rollover. Q3FY26 was a strong performance on offtake, marginally offset by pricing weakness and dela...
TD Power Systems: Global demand fuelling growth visibility - Company Update
We upgrade TD Power to BUY / revise our target price upwards to Rs 875 (vs. Rs 840 earlier). Q3-FY26 results were a tad lower than our expectations and reflect timing issues rather than demand or competitive weakness. Going ahead, the Tumkur facility...
SJS Enterprises Ltd - Premiumisation and Export-led Outperformance - Company Update
We revise our target price on SJS Enterprises upwards to Rs2,190 to account for an increase in revenue/ margin estimates, and valuation roll-forward to Dec’27E. SJS delivered another quarter of strong industry outperformance, with record profitabil...
Sundram Fasteners Ltd.: Exports spoil the show - Company Update
We lower target price to Rs 1035 (previously Rs 1085) and maintain Accumulate rating for Sundram Fasteners Ltd. (SFL). We downward revise our multiple to account for extended weakness on exports including delay in EV order to North America, in turn l...
ASK Automotive Ltd. - Firing on all cylinders - Company Update
We upgrade ASK Automotive to BUY rating on attractive valuation and increase our TP to Rs590 (Rs525 previously). The increase in TP is largely driven by valuation rollover. ASK delivered a strong Q3, materially ahead of our expectations, led by broad...
Kirloskar Ferrous Ind. - Casting and tubes outperform, spreads spoil the show | Company Update
We lower our target price to Rs 620 (previously Rs690) and retain BUY rating for Kirloskar Ferrous Industries Ltd. (KFIL). The decrease in TP is mainly to account for weak commodity spreads and realization across end products . KFIL’s 2QFY26 perfor...
IFGL Refractories Ltd. - Domestic focus continues to payoff; overseas improving gradually | Company Update
We decrease target price to Rs 280 (previously Rs 300) but maintain BUY rating. The change in TP is mainly due to cut of earnings estimates. IFGL delivered another quarter of strong standalone growth as its domestic-focused strategy continues to gain...
Borosil Ltd. - Glassware ignites growth; levers to power margins | Company Update
We reiterate our BUY on Borosil Ltd and revise our target price upwards to Rs. 460 (vs. Rs. 420 earlier), driven by strong demand momentum and emerging structural growth and margin levers. The company continues to deliver robust growth in its glasswa...
Venus Pipes & Tubes Ltd. - Export and welded drives confidence | Company Update
We increase Target Price to Rs 2040 (previously Rs1,950) and retain BUY for Venus Pipes & Tubes (VENUS) due to attractive valuations. Increase in TP is primarily due to valuation roll forward. Revenue in 2QFY26 was strong, supported by a sharp re...
ESAB India - Encouraging quarter; growth in focus | Company Update
We retain Buy on ESAB India with TP revised upwards to Rs 6,850 (vs Rs 6,554 earlier) on valuation rollover. The company delivered a strong quarter, with overall growth hinting at signs of recovery supported by margin gains. ESAB continues to o...
The Anup Engineering - All eyes on cash conversion | Company Update
We maintain our HOLD rating on Anup Engineering but increase TP to Rs 2,475 (vs Rs 2,375 earlier) considering steady operational performance and an unchanged growth outlook coupled with valuation rollover. The impact from higher taxes was anticipated...
Rashi Peripherals Ltd – Turns cashflow positive
We retain "BUY" rating with a Target Price of Rs. 505 (vs Rs 525 earlier). Rashi Peripherals ltd reported decent topline growth, on the back of strong sales from the PES segment (PCs, Desktops). Our dealer checks suggest demand is improving for AI-en...
Wonderla Holidays - Chennai on Track; Expansion Visibility Low | MNCL Research Update
We reiterate our HOLD rating on Wonderla Holidays Ltd while revising our target multiple downwards to 18x (from ~20x) and rolling forward our valuation to Q2FY28E. In a seasonally weak quarter, the company delivered a better-than-expected topline, pr...
R Systems International - Strong growth tempered by higher SG&A & RSU costs | MNCL Research Update
We maintain our "BUY" and retain our target price to Rs 620. R Systems delivered higher than expected topline growth (7.9% vs our estimate of 3.5% in INR terms). EBITDA was in line with our estimates / margins dipped 70bps QoQ on the back of higher R...
SJS Enterprises Ltd - Designed to outperform | MNCL Research Update
We revise our target price on SJS Enterprises upwards to Rs1,930 to account for an increase in revenue/ margin estimates, valuation roll-forward to Sept’27E and target multiple expansion. SJS delivered another quarter of strong industry outperforma...
Channel checks - Opalware and Glassware - Borosil Sets the Benchmark in Opalware Retail
We conducted channel checks across key markets in Western and Northern India to gauge demand trends (qualitative aspects) in the Opalware and Glassware categories. We also analysed balance sheet / profitability trends (quantitative parts) across key ...
Goldiam International - LGD Momentum builds; ORIGEM scaling | Company Update
We reiterate our BUY rating on Goldiam International with a target price of Rs. Rs.470. Despite near-term uncertainty around U.S. tariff implications, the company has delivered an exemplary performance driven by robust topline growth and increasing w...
ASK Automotive Ltd – Meets Expectations; ALPS & Aftermarket to Drive Growth | MNCL Research Company Update
We retain ACCUMULATE on ASK Automotive while lowering our target price to Rs 525. The lowering of TP follows downward revision in our revenue and margin estimates, partially offset by valuation rollover. ASK delivered a strong Q2, broadly in line wit...
Sundram Fasteners Ltd. - Steady Domestic Momentum Offsets Export Weakness; upgrade to Accumulate - Company Update
We increase target price to Rs 1085 (previously Rs1030) and upgrade our rating to Accumulate for Sundram Fasteners Ltd. (SFL) due to steep correction in share price. Increase in TP is mainly due to valuation roll forward. SFL’s performance in 2QFY2...
JNK India Ltd – End of Overhang, Execution to Drive Growth | Q2FY26
Our interaction with JNK India led to the following conclusions: JNK India’s legacy low-margin orders (NRL, IOCL) delayed by site and client issues are expected to conclude largely by Q2FY26, with minor spillover into Q3FY26. From Q3FY26, high-marg...
Ratnamani Metals and Tubes Ltd. - Subsidiaries outperform | Company Update
We increase target price to Rs 2710 (previously 2690) and upgrade to Accumulate rating. Increase in target price is due to valuation roll forward. In 2QFY26, the core pipes business saw modest growth as strong offtake was offset by weak realizations....
