Welspun Corp gains as foreign brokerage initiates Buy call

Welspun Corp rose 3.03% to Rs 2,600 after a foreign brokerage initiated coverage on the company with a 'Buy' rating and a target price of Rs 3,250.

The target price implies an upside of 25% from the ruling market price. The stock hit an all-time high of Rs 2,676 in early trade today.

The brokerage said Welspun Corp is well positioned to benefit from a multi-year upcycle in oil and gas infrastructure spending in the US and the Middle East, supported by its local manufacturing presence in both regions.

It expects the company to deliver a 17% volume CAGR and 32-33% EBITDA and EPS CAGR over FY26-29E. The growth is expected to be driven by capacity expansion, a strong order book and an improving business mix.

The brokerage expects earnings growth to be supported by a 51% expansion in capacity across the US and Saudi Arabia, along with a rising contribution from the company's higher-margin overseas business.

Welspun Corp's order book stood at Rs 42,100 crore, equivalent to around 2.5 times its FY26 revenue, providing strong visibility on future revenue, according to the brokerage.

The brokerage expects the company's net cash position to increase from Rs 1,400 crore at the end of FY26 to Rs 3,900 crore by FY29E. It also noted that the company generated a 21% return on equity (ROE) during FY24-26 and expects this to improve to 22-23% over FY27-29E.

At 18 times one-year forward EV/EBITDA, the brokerage believes Welspun Corp's valuation remains reasonable. While the multiple has expanded in 2026, it believes a premium valuation is justified by the company's strong earnings growth outlook, robust order book and high ROEs.

The brokerage also said Welspun Corp appears reasonably valued compared with US energy infrastructure beneficiaries when assessed against its EBITDA growth and price-to-book valuation relative to ROE.

Key risks to the brokerage's view include slower-than-expected order inflows and delays in capacity expansion.

Welspun Corp has a diversified portfolio spanning line pipes, ductile iron pipes, stainless steel bars, pipes and tubes, and TMT rebars. It also houses Sintex, a brand focused on water storage tanks and advanced plastic piping solutions. The company serves customers across more than 50 countries on six continents, supported by manufacturing facilities in India, the US and Saudi Arabia.

The company's consolidated net profit surged 198.64% to Rs 1046.49 crore on a 14.91% rise in revenue to Rs 4081.12 crore in Q1 FY27 over Q1 FY26.

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