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Venus Pipes & Tubes Doubles Investors Money in 8 Months; Is There More Steam Left?


Multibagger Stocks to Buy: Venus Pipes & Tubes, a 2022 market debutant, has doubled investors’ money in less than a year. The company’s IPO was in fact one of the blockbusters in 2022.

Venus Pipes IPO was launched in May 2022 at a price band of Rs 310 to Rs 326 per equity share. Venus Pipes shares listed at Rs 335 on BSE and at Rs 337 on NSE, delivering around a 3 per cent listing premium to its allottees. However, those allottees who remained invested in the stock after flat listing and they are still invested in Venus Pipes shares, their money has got more than doubled within one year of listing because Venus Pipes share price ended on Tuesday at Rs 724.35 on NSE, around 115 per cent higher from its listing price and near 122 per cent higher from its upper price band of Rs 326 apiece. So, Venus Pipes shares have doubled money of its allottees and shareholders in 8 months of its listing.

From the issue price, the shares of the company have delivered a return of 125 per cent return to investors, making it one of the best-performing IPOs of 2022. The counter hit a 52-week high of Rs 775 in November 2022.

The imposition of five-year anti-dumping on stainless steel seamless tubes and pipes from China up to 2027 will increase the cost of hollow pipe procured from China, but Venus has enough stock in place to meet 2‐3 months of orders, said Centrum Broking.

Costlier imports may lead to increase in prices of stainless steel seamless pipes prices by Rs 20 per kg, it said.

The recent announcements‐ firstly roll back of 15 per cent export duty and now imposing import duty sets a very positive outlook for the stainless steel pipe industry, Centrum Broking said.

Venus Pipes reported strong financials in the September quarter, with revenues increasing 10.52 per cent QoQ and 41 per cent on YoY basis. For FY19-22, the company witnessed good growth with sales CAGR of 48 per cent and Ebitda CAGR of 61 per cent, Share India Securities said in a note.

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“Venus Pipes and Tubes is well placed at this time with respect to growth and expansion of product offerings. The company has managed to get customers like Amul, Asian Paints, Adani group, Bharat Petroleum, Cipla, BHEL, Godrej, ITC. The company exports its products to more than 20 countries,” the brokerage said.

Venus Pipes is in process of increasing capacity by 2.8 times to 33.6 kilo tonnes per annum (ktpa). The company is looking to scale up domestic customers and exports, coinciding with meaningful tailwinds for demand. This would be driven by government spending under PLI scheme, Share India Securities said. The brokerage has a ‘Buy’ rating on the stock with a target price of Rs 850.

Centrum factors in higher realisation and benefit of import duty in margins and revised its target price to Rs 940 from Rs 848 earlier, suggesting a upside potential of 30 per cent from the current prices.

Ravi Singh, Vice President and Head of Research at Share India also believes that Venus Pipes shares may continue its rally in short to medium term. “Venus Pipes is looking attractive on daily and weekly chart patterns. The counter is experiencing an increase in trading volumes well supporting an up move in near term. The momentum indicators and oscillators are suggesting a medium term target of Rs 790 and Rs 850 levels,” said Ravi Singh of Share India.

Disclaimer:Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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