1 week ago
Jefferies Sees Welspun Corp Growth From US, Saudi Expansion
Welspun Corp makes very large pipes used in energy and water projects.
Jefferies, a financial research firm, thinks the company’s business could grow strongly.
It set a possible share-price target of Rs 3,250, about 27% above the current level mentioned in the report.
The United States may buy more pipes because of growing gas exports, electricity needs from data centres and rising gas production.
Saudi Arabia is also investing in gas and water infrastructure.
Welspun has a large order book and is building more factories in both countries.
Jefferies expects profits and earnings per share to grow quickly through FY29.
However, slower project execution and stronger competition could hurt near-term demand and margins.
Jefferies initiated a Buy rating on Welspun Corp with a Rs 3,250 price target, implying potential upside of 27%.
The brokerage expects US energy infrastructure spending to support demand for welded line pipes.
Welspun Corp has about 30% of the US market and is expanding capacity in the United States and Saudi Arabia.
The company has a Rs 42,100 crore order book, equal to about 2.5 times projected FY26 revenue.
Jefferies projects 17% annual volume growth and roughly 32-33% annual EBITDA and EPS growth from FY26 to FY29, while warning about execution and competition risks.
- Who
- Jefferies and Welspun Corp.
- What
- Jefferies gave Welspun Corp a Buy rating and set a Rs 3,250 price target, citing several potential growth drivers.
- Where
- The growth opportunities are concentrated in the United States and Saudi Arabia, with additional business in India.
- When
- The forecast covers FY26 through FY29; the article does not provide a specific publication date.
- Why
- Jefferies expects capacity expansion, a large order book, stronger overseas operations and infrastructure spending to increase earnings.
Key facts
- Brokerage rating
- Buy
- Price target
- Rs 3,250
- Potential upside
- 27%
- Total pipe capacity
- 2.4 million tonnes per annum
- Order book
- Rs 42,100 crore, about 2.5 times projected FY26 revenue
- Projected volume growth
- 17% compound annual growth from FY26 to FY29
- Projected EBITDA and EPS growth
- Approximately 32-33% annually from FY26 to FY29
- Saudi capacity under construction
- 600,000 tonnes per annum
Quotes
Jefferies
Global brokerage covering Welspun Corp
“We expect strong 33% EPS CAGR over FY26-29E led by capacity expansions, robust order book and improving mix, along with rising net cash and 23% ROE.”
financialexpress.com
“US energy infrastructure is in a multi-year investment phase.”
financialexpress.com
Sources
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