Multibagger stock trades near record high; over 40% rally seen

Venus Pipes' products have wide application in sectors such as chemicals, engineering, fertilizers, pharmaceuticals, power, food processing, paper, and oil & gas. Its ongoing expansion would raise its capacity to 33.6 ktpa along with backward integration of 9.6 ktpa (piercing line to manufacture hollow pipes from stainless steel round bars), as per brokerage Antique Stock Broking. 

Venus' only manufacturing plant, having a total cumulative production capacity of 12 ktpa (3.6 ktpa of seamless pipes and 8.4 ktpa of welded pipes), is located at Dhaneti (Kutch, Gujarat) and is in close proximity to Kandla (55 kms) and Mundra (75 kms) ports. 

“We see rising exports and domestic sales aiding Venus' top-line growth, while backward integration initiatives are expected to support higher margins. We like the growth prospects, comfortable leverage levels (FY25E net debt to EBITDA expected to improve to 0.5x level) and initiate coverage on Venus with BUY rating and target price of ₹1,037,” the brokerage said.

Venus Pipes shares made their stock market debut in May last year and the stock has given multibagger return by rallying more than 119% in the last 11 months since its listing on the stock exchanges, from its initial public offering (IPO) issue price of ₹326 per share to currently hovering over ₹729, implying more than 40% upside potential from current stock level. The stock is trading near its all-time high level of ₹774 it had hit in November 2022.

The Gujarat-based company is a growing stainless-steel pipes and tubes manufacturer and exporter in India. The company, under the brand name Venus, supplies its products for applications in diverse sectors, including chemicals, engineering, fertilizers, pharmaceuticals, power, food processing, paper and oil and gas.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.