The target price for Venus Pipes and Tubes is set at ₹1,700, while the current market price stands at ₹1,302.25. Over the past five years, the company has significantly increased its cumulative capacity to 38,400 tonnes and is now expanding further to reach 46,800 tonnes. This expansion has led to a market share increase from 3.6% to 6.2% over the period of FY20-24, outpacing its peers with a volume CAGR of around 28%.
By focusing on high-grade stainless steel/titanium-welded tubes, fittings, and seamless pipes/tubes, Venus Pipes and Tubes has seen a rise in its EBITDA margin by 570bps over FY23-24. The company’s strategy of enhancing its product portfolio, increasing domestic market share, and expanding global presence is expected to drive revenue, EBITDA, and APAT CAGRs of 24%, 26%, and 28% respectively over FY24-27.
Additionally, the company’s emphasis on capacity expansion, backward integration, and robust global presence sets it up for continued volume momentum. With the imposition of ADD/CVD on raw material imports, Venus Pipes and Tubes is poised for further growth. Despite risks such as a slowdown in domestic demand or exports, as well as delays in capex timelines, the overall outlook remains positive. Therefore, the Buy rating is retained with a target price of ₹1,700 using a weighted average method.
