Venus Pipes & Tubes Ltd- Welding growth and profitability - Company Update

Venus’ 4QFY26 was largely in line with our estimates. Revenue 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. Venus has a well-diversified robust order book of Rs 4.5bn, with strong traction from power, Chemicals, Oil & gas and exports. Additionally, Venus has announced a capex to manufacture spooling with an LOI from a data centre customer, in turn securing offtake. 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 CAGR of 23%/ 27%/ 36% CAGR in Rev/ EBITDA/PAT over FY26-28E. We have revised our earnings estimates by -2.5%/ 1.8% in FY27/FY28E respectively to account for the new spooling business, partially offset by slow growth in welded segment and higher depreciation . We value Venus Pipes at 20x Mar’28E earnings (unchanged) to arrive at TP of Rs 1,830/share (previously Rs 1,680/share) and maintain BUY rating due to attractive valuations

Strong revenue momentum driven by seamless pipe demand:

Venus reported +17% yoy revenue growth at Rs 3.0bn, led by strong domestic demand and continued growth in seamless pipes. The seamless pipes revenue grew 18% yoy; 17% qoq to Rs 1.8bn; welded division posted growth of 15% yoy; flat qoq at Rs 1bn. The proportion of seamless pipes in the revenue mix stood at 63% (vs 63% yoy & 60% qoq). Export revenues softened to Rs 878mn; -22% yoy due to global headwinds and its share in revenue was 29% versus 44% yoy. FY26 revenue at Rs 11.7bn; +22% yoy.

Margins improved due to favourable product mix:

EBITDA margins increased by 23bps yoy at 16.3%, mainly due to expanding gross margins (led by higher contribution of seamless pipes). Venus recorded EBITDA at Rs 494mn (+19% yoy; +1% qoq). Effectively, PAT stood at Rs 253mn, +7% yoy. FY26 EBITDA was at Rs 1.9bn; +14% yoy with a margin of 16.3%; -120bps yoy. FY26 PAT at Rs 1bn; +10% yoy.

Expansion into integrated solutions to drive next phase of growth:

Exports have declined to 29% in 4QFY26 (44% in Q4FY25), owing to global uncertainty during the quarter. Venus has executed ~60% of the Rs 1.9bn order for Stainless Steel Seamless Boiler Tubes for thermal power project and expects full completion by Jun’26. Post the start of fitting and titanium welded pipes capacity, Venus has recently commissioned the remaining seamless tubes expansion, taking total seamless expansion to 6,000 MTPA along with equivalent backward integration through mother hollow pipes. The company has also announced ~Rs 700mn capex towards a dedicated spooling and fabrication facility, backed by a Rs 1.9bn LOI from a leading data centre customer executable over 15 months. Going forward, the share of value-added products is expected to increase due to these new projects, driving higher realizations and enabling broader use in specialized applications. Robust order book at Rs 4.5bn, ramp up of new capacities, addition of new grades and sizes, focus on exports, new approvals into oil & gas, chemicals, semiconductors, hydrogen and nuclear power (through titanium tubes) should drive a solid 23%/ 27%/ 36% CAGR in Rev/ EBITDA/ PAT over FY26-28E. We have revised our earnings by -2.5%/ 1.8% in FY27/FY28E respectively to account for the new spooling business, partially offset by slow growth in welded segment and higher depreciation. Remain positive.

Valuation and rating:

We value Venus Pipes at 20x Mar’28E earnings (unchanged) to arrive at TP of Rs 1,830/share (previously Rs 1,680/share) and maintain BUY rating due to attractive valuations. The upward revision in TP is largely due to valuation roll forward. 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 Q4FY26 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 Q4FY26 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 drove Venus Pipes’ Q4FY26 growth?

Growth was driven by strong domestic demand, seamless pipe traction and higher contribution from value-added products.

2. Why are margins improving for Venus Pipes?

Margins improved due to a favorable product mix, especially higher seamless pipe contribution and better gross margins.

3. What are the key future growth drivers?

New approvals in oil & gas, hydrogen, nuclear and semiconductor sectors along with spooling and titanium tube expansion are expected to drive growth.

4. What is the significance of the spooling business?

The new spooling and fabrication facility backed by a data centre customer LOI strengthens Venus Pipes’ presence in integrated industrial solutions.

5. What are the major risks for the company?

Key risks include delays in approvals, export weakness and slower industrial demand recovery.

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