Venus Pipes & Tubes Ltd: Domestic seamless pipe drives performance - Company Update

We reduce target price to Rs 1680 and retain BUY for Venus Pipes & Tubes (VENUS) due to attractive valuations. Decrease in target price is to account for structural elevation in operational expenses. Revenue in 3QFY26 was strong, supported by a sharp rebound in domestic demand and high traction in seamless pipes, while margins expanded on account of favourable product mix despite high opex. Venus has a well-diversified robust order book of Rs4.7bn, with strong traction from power, Chemicals and export markets. We expect new approvals from industries like Oil & gas, energy, hydrogen and nuclear, addition of new grades (titanium) and fittings and a rising traction from exports, to result in strong growth. Re-iterate BUY.

Strong revenue momentum driven by seamless pipe demand:

VENUS reported +28.3% yoy revenue growth at Rs2.97bn, led by strong domestic demand and sharp growth in seamless pipes. The seamless pipes revenue grew 43.5% yoy; 9.4% qoq to Rs1.8bn; welded division posted growth of 12.8% yoy; -11.3% qoq at Rs1bn. The proportion of seamless pipes in the revenue mix stood at 61% (vs 54% yoy & 56% qoq). VENUS delivered resilient export performance due to global headwinds at Rs940mn; +4.9% yoy and its share in revenue was 32% versus 39% yoy.

Margins improved due to favourable product mix:

EBITDA margins increased by 43bps yoy and 17bps qoq at 16.5%, mainly due to expanding gross margins (led by increased proportion of seamless pipes). VENUS recorded EBITDA at Rs489mn (+31.7% yoy; +2.8% qoq). Effectively, Adj. PAT stood at Rs263mn, +46.1% yoy (Adjusted for impact of new labour codes).

Domestic momentum accelerates:

Exports have reached a contribution of 32% in 3QFY26, owing to global uncertainty during the quarter despite Venus’ network in Europe and Middle East. Venus has executed 40% of the Rs1.9bn order for Stainless Steel Seamless Boiler Tubes for thermal power project and expects full completion by Jun’26. The company commissioned ~1,800 MTPA seamless capacity and is progressing towards commissioning the fittings unit by Mar’26. Going forward, the share of value-added products is expected to increase, driving higher realizations and enabling broader use in specialized applications. Robust order book at Rs4.7bn, ramp up of new capacities, addition of new grades and sizes, focus on exports, entry into oil & gas, railways, chemicals, semiconductors, hydrogen and nuclear power (through titanium tubes) should drive earnings growth. Remain positive.

Valuation and rating:

We have marginally tapered our earnings by 4%/ 3% in FY26/FY27E resp to account for the slow growth in welded segment and higher depreciation. We value Venus Pipes at 20x Dec’27E earnings (25x previously) to arrive at TP of Rs1680/share (previously Rs2040/share) and retain BUY rating due to attractive valuations. Reduction in target price is to account for the structural elevation in operational expenses. Key risks: Delay in approvals, weakness in exports.

Company website: https://www.venuspipes.com/

*CMP is as per report published date

Click to download the full Venus Pipes & Tubes Ltd Q3FY26 Company Update

Analyst:

• Sahil Sanghvi - Research Analyst, Institutional Equities (NISM-201900004744)
• Uvais Khatri - Research Associate, Institutional Equities (NISM-202300049054)

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FAQs on Venus Pipes & Tubes Ltd Q3FY26 Company Update

These FAQs summarize key insights from MNCL’s institutional equity research on Venus Pipes & Tubes, highlighting growth drivers, outlook and key risks.

1. What is MNCL’s rating on Venus Pipes & Tubes?

MNCL has retained a BUY rating with a target price of ₹1,680, implying ~44% upside from current levels.

2. What is driving the company’s strong performance?

Revenue growth is led by robust domestic demand and strong traction in seamless pipes, which now form a larger share of the product mix and support margin expansion.

3. How strong is the order book and growth visibility?

The company has a diversified order book of ₹4.7bn, along with capacity expansion, new product additions and increasing participation in high-growth sectors.

4. Which sectors will drive future growth?

Key opportunities include oil & gas, power, chemicals, railways, semiconductors, hydrogen and nuclear applications, along with rising export traction.

5. What are the key risks to the outlook?

Delays in industry approvals, weaker export demand or sustained pressure from higher operating costs could impact earnings growth.

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