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Anand Rathi Report
We expect Venus Pipes and Tubes Ltd.'s revenue/Ebitda to register 31.5%/51.9% compound annual growth rates over FY23-FY26 and initiate coverage on the company with a 'Buy' rating and a target price of Rs 1,700, 25% potential (23 times FY26e price/earning).
The PE multiple attributed to value the company is on par with peer Ratnamani Metals and Tubes Ltd.’s five-year average P/E, which we believe is fair due to excellent return ratios and structural rise in margins.
Key risks: Export-related weakness due to ongoing war, tough peer competition, policy change shocks
About the company
One of the growing stainless-steel pipe and tube manufacturers and exporters in India, Venus Pipes is involved in the production of stainless steel welded and seamless pipes and tubes. These are used in various industries including oil and gas, fertilisers, pharma, food and beverage, engineering and chemicals.
The company has a strong focus on research and development, with its in-house research and development centre continuously working on developing products and improving existing ones. This has helped it retain its position as one of the leading players in the stainless-steel pipe and tube segment
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Also Read: Muthoot Microfin IPO - Investment Rationale, Issue Details, Financials, Valuations: Anand Rathi
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