Venus Pipes & Tubes: PAT growth of 58% & Revenue up 34% in Q1-25 at a PE of 46
Volume CAGR of 30%+ for FY24-26. Guidance for EBITDA margin expansion by VENUSPIPES in FY25. Capex operationalized to support FY25 volumes. New Capex to support growth beyond FY26
1. Manufacturer of stainless-steel pipes and tubes
venuspipes.com | NSE: VENUSPIPES
Revenue Split
Product split changing with an increasing contribution of seamless pipes.
2. FY20-24: PAT CAGR of 114% & Revenue CAGR of 46%
3. Strong FY24: PAT up 94% and Revenue up 45% YoY
4. Strong Q1-25: PAT up 58% and Revenue up 34% YoY
PAT up 11% and Revenue up 7% QoQ
5. Strong return ratios
6. Outlook: Volume CAGR of 30%+ till FY26
i. FY24-26: Volume growth CAGR of 30%+
ii. FY25: EBITDA margin improvement.
VENUSPIPES is guiding for margin improvement in FY25
FY '23, '24, we achieved more than INR64 per kg EBITDA on a blended basis. And for this year, I believe it will be 3% to 5% incremental should be there.
increase in exports will -- where the margin is slightly higher, that will also help.
iii. Capex in place for FY25; New capex to support FY26.
8. PAT growth of 58% and Revenue up 34% in Q1-25 at a PE of 46
9. So Wait and Watch
If I hold the stock then one may continue holding on to VENUSPIPES
Coverage of VENUSPIPES was initiated after Q1-24 results. The investment thesis has not changed after a strong FY24 and and even stronger Q1-25.
Company has reported highest-ever quarterly and yearly revenue EBITDA and PAT for Q1 FY '25.
PAT margins at an all-time high of the 11.5%
Outlook is positive given guidance of 30% volume CAGR for FY24-26
We enter FY25 and we look at an optimistic future characterized by the ongoing expansion of our product range and client base.
Very strong commentary from the management
Strong momentum not only in our key market of Europe but also seeing substantial traction in the US and Middle East markets.
Our capacity utilization remains robust for both seamless and welded pipes with a strong order book and a clear vision for the future. We are optimistic about our continued growth and success
10. Join the ride
If I am looking to enter VENUSPIPES then
VENUSPIPES has delivered PAT growth of 58% and revenue growth of 34% in Q1-25 at a PE of 46 which makes the valuations fully priced.
Outlook for 30%+ volume CAGR for FY24-26 with bottom-line growing faster than the top-line on account of EBITDA margin expansion at a PE of 46 which makes the valuations acceptable over the longer term.
The performance of Q1-25 looks well discounted in the price. The opportunity in stock is from the performance from FY26 onward.
A PE of 46 looks rich in the short term hence positions need to be built over time over bad days when the stock is not doing well. Reaction in stock price will be seen if execution for even one quarter is not in line with the guidance given.
Previous coverage of VENUSPIPES
Don’t like what you are reading? Will do better. Let us know at hi@moneymuscle.in
Don’t miss reading our Disclaimer