Ador Welding: IDBI Capital Maintains 'Buy' After Q2 Results, Sees 42% Upside, Here's Why

IDBI Capital Report

Ador Welding Ltd. reported subdued financial performance in Q2 FY25 which was impacted by one-offs relating to the amalgamation of Ador Fontech. The products segment witnessed margin dip of 404 bps QoQ to 10.2% owing to slowdown of demand and weaker steel prices. Margins for the ONGC Flares project are also expected to be better in H2 FY25 with better execution and and rigorous cost control.

We expect Ador Welding to benefit from the multi-year domestic capex upcycle as it caters to diverse capex led industries such as heavy engineering, infrastructure, construction among others.

The company is the second largest player in the welding industry in India with a strong market share of ~16% in welding consumables space and ~8% market share in welding equipment space.

We maintain our Buy rating on Ador Welding with target price of Rs 1,621.

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