1 week ago
Welspun Corp Shares Rally 28% as Brokerages Raise Targets
Welspun Corp makes large pipes used in energy projects.
Its shares climbed 28% over six days after the company received a large order from the United States.
The pipes will help move more than 3 billion cubic feet of gas from the Permian Basin to the Gulf Coast.
This order made the company’s future work pipeline much larger.
Systematix raised its expected share price from Rs 1,794 to Rs 2,363.
Analysts believe the company could grow strongly because of demand in the United States, Middle East and India.
One brokerage expects the company’s earnings to grow quickly between FY26 and FY29.
The company has also indicated that its EBITDA could reach about Rs 50 billion over the next three to four years, although it did not give a specific profit margin for this order.
Welspun Corp shares rose 28% in a six-day rally after a major United States pipe order.
The order involves pipes for transporting more than 3 billion cubic feet of gas from the Permian Basin to the Gulf Coast.
Systematix said the order increased Welspun Corp’s order book from Rs 25,750 crore to Rs 42,100 crore.
Systematix raised its target price to Rs 2,363 per share from Rs 1,794 and increased its earnings estimates.
Brokerages expect demand from the United States, Middle East and India to support growth through FY29.
- Who
- Welspun Corp, along with brokerages Systematix, Equirus Securities and Nuvama.
- What
- Welspun Corp shares rallied after a major United States pipe order strengthened its order book and led brokerages to raise estimates and targets.
- Where
- The order relates to gas transportation from the Permian Basin to the Gulf Coast in the United States. Analysts also cited opportunities in the Middle East and India.
- When
- The stock rose over six days; Equirus issued comments on August 23 and Nuvama issued its note on August 21. No year was specified.
- Why
- The order improved revenue visibility, while expected energy-infrastructure spending and pipe demand are supporting the company’s outlook.
Key facts
- Share-price move
- Welspun Corp shares rose 28% over six days.
- Order-book change
- Systematix said the order book increased from Rs 25,750 crore to Rs 42,100 crore.
- United States order
- The pipes will support the evacuation and transportation of more than 3 billion cubic feet of gas from the Permian Basin to the Gulf Coast.
- Revised target price
- Systematix raised its target to Rs 2,363 per share from Rs 1,794.
- Order-book concentration
- Systematix said 60-65% of the record order book is concentrated in the United States.
- FY27 EBITDA guidance
- Management maintained guidance for EBITDA of Rs 28 billion in FY27E.
- Long-term EBITDA direction
- Equirus said management indicated the company is directionally moving toward about Rs 50 billion of EBITDA over the next three to four years.
Quotes
Equirus Securities
Brokerage commenting on Welspun Corp’s multi-year earnings potential.
“Though no specific absolute EBITDA target was given, the management indicated that the company is directionally moving towards ~Rs 50bn of EBITDA over the next 3-4 years, supported by the strong US demand environment, expected demand from M.E. and timely capacity expansion.”
businesstoday.in
“We expect Welspun Corp to deliver revenue/EBITDA/PAT CAGR of 26 per cent/28 per cent/29 per cent over FY26-FY29E and value WLCO on a SoTP basis on 1HFY29E EV/EBITDA and revise our target price to Rs 2,363/share (Rs 1,794/share earlier).”
businesstoday.in
Sources
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