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 rebound in welded pipes and high traction in exports, while margins moderated on account of higher opex as the company scales newly commissioned capacities. Venus has a well-diversified robust order book of Rs 4.9 bn, with strong traction from power, engineering 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.
VENUS reported +27.3% yoy revenue growth at Rs2.92bn, led by strong demand across key segments and sharp recovery in welded pipes. The seamless pipes revenue grew 25.4% yoy; 7.3% qoq to Rs1.64bn; welded division posted growth of 48.5% yoy; 9.4% qoq at Rs1.13bn. The proportion of seamless pipes in the revenue mix stood at 59% (vs 63% yoy & 60% qoq). VENUS delivered strong export performance at Rs1.15bn; +53% yoy and its share in revenue was 40% versus 33% yoy.
EBITDA margins declined by 159bps yoy but stable qoq at 16.3%, mainly due increase in other expenses and employee cost, despite stable gross margins. VENUS recorded EBITDA at Rs475mn (+16% yoy; +6% qoq). Effectively, PAT stood at Rs261mn, +10.3% yoy.
Exports have reached a contribution of 40% in 2QFY26, owing to Venus’s network in Europe and Middle East, despite near term uncertainty in the US. Venus has executed 15% 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 in 4QFY26. 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 Rs4.9bn, 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.
We have marginally tapered our earnings by 6%/ 5% in FY26/FY27E resp. We value Venus Pipes at 25x Sep’27E earnings to arrive at TP of Rs2,040/share (previously Rs1,950/share) and retain BUY rating due to attractive valuations. Increase in TP is primarily due to valuation rollover. Key risks: Delay in approvals, weakness in export pricing.
Company website: https://www.venuspipes.com/
| Rating | BUY |
|---|---|
| CMP | INR 1,279 |
| Target Price | INR 2,040 |
| Upside | 59% |
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Venus Pipes & Tubes Ltd has a BUY rating with a revised target price of Rs 2,040, implying an upside of 59% from the current market price of Rs 1,279.
The target price was increased primarily due to valuation roll forward, while the BUY rating has been retained based on attractive valuations.
The company reported revenue of Rs 2.92 bn in Q2FY26, registering a year-on-year growth of 27.3%, supported by strong export demand and recovery in welded pipes.
Revenue growth was driven by both seamless and welded pipes. Seamless pipes revenue grew 25.4% YoY to Rs 1.64 bn, while the welded pipes division recorded a 48.5% YoY growth to Rs 1.13 bn.
Exports contributed 40% of total revenue in Q2FY26, amounting to Rs 1.15 bn, reflecting a 53% year-on-year growth, supported by demand from Europe and the Middle East.
EBITDA margins declined year-on-year due to higher operational expenses, including increased employee costs and other expenses, despite stable gross margins.
EBITDA stood at Rs 475 mn, up 16% YoY, while PAT increased 10.3% YoY to Rs 261 mn.
Venus Pipes has a robust and diversified order book of Rs 4.9 bn, with demand coming from power, engineering, and export markets.
The company has commissioned approximately 1,800 MTPA of seamless capacity and is progressing toward commissioning its fittings unit in Q4FY26.
Management expects gradual revival in domestic demand, higher contribution from value-added products, and continued export traction, supported by entry into sectors such as oil & gas, energy, hydrogen, and nuclear power.
The valuation is based on applying a multiple of 25x September 2027E earnings, resulting in a target price of Rs 2,040 per share.
Key risks include delays in approvals and potential weakness in export pricing.
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Monarch Networth Capital Limited (‘MNCL’) | CIN No.: L64990GJ1993PLC120014
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Monarch Networth Capital Limited
Unit No. 803-804A, 8th Floor, X-Change Plaza, Block No. 53, Zone 5, Road-5E, Gift City, Gandhinagar - 382050, Gujarat
Ahmedabad
“Monarch House”, Opp Prahladbhai Patel garden, Near Ishwar Bhuvan, Commerce Six Roads, Navrangpura, Ahmedabad – 380009
Mumbai
Monarch Networth Capital Limited, G Block, Laxmi Tower, B Wing, 4th Floor, Bandra Kurla Complex, Bandra East, Mumbai - 400051.
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