Target: ₹1,151
CMP: ₹1,165.80
Ador Welding (AWL) reported a modest financial performance for Q2 FY26, with a year-on-year revenue growth of approximately 4%, attributed to improved realizations while volumes remained stable. Current margins are anticipated to be sustainable moving forward. The completion of the ONGC Uran Flares project is expected this quarter, leading to no further surprises in the short term.
For FY27, the company is projected to experience enhanced profitability, primarily driven by core business performance with minimal influence from project-related activities. Ador is positioning itself to capture emerging opportunities from a domestic capital expenditure upcycle, particularly in sectors like defense and shipbuilding. The management team has been strengthened with key hires, which is seen as a positive development for long-term strategy.
Despite flat demand in the recent quarter, Ador is expected to perform better due to an infrastructure-led demand trend and the introduction of new, margin-enhancing products. While the company’s expansion into the U.S. market has been hindered by tariff issues, there remains optimism regarding opportunities in Brazil and potential entry into new markets.
Given the richer valuations, the recommendation for Ador Welding has been adjusted to a Hold rating with a target price of ₹1,151, based on an 18x multiple of expected FY27 earnings.
Published on October 16, 2025