Venus Pipes

Venus Pipes & Tubes reported strong financial results for Q3 FY26, with revenue from operations growing 28.3% year-on-year to INR296.7 crores. For the nine months ended December 31, 2025, revenue reached INR864.7 crores, already 90% of the full FY25 revenues, indicating sustained growth momentum. Profit After Tax (PAT) for Q3 FY26 saw a significant increase of 42% year-on-year to INR25.6 crores. The company's EBITDA margin for Q3 FY26 improved to 16.4% from 16.1% in the corresponding period last year, reflecting operational efficiencies.

The company maintains a strong order book of approximately INR470 crores, which is a substantial increase from less than INR350 crores in the previous year. This order book provides good revenue visibility, with an expected execution timeline of 6-7 months. Management highlighted that new capacities for fittings and seamless pipes are progressing well and are anticipated to be fully operational by the end of March 2026. These new facilities are expected to be key drivers for accelerating growth and contributing significantly to revenues in FY27 and FY28.

Venus Pipes is strategically enhancing its value-added product (VAP) portfolio, which currently accounts for 15-20% of its business and is projected to double with ongoing expansions. The company is actively targeting critical end-use sectors such as power, oil & gas, engineering, and food processing, which demand high technical expertise and product quality. The power sector alone presents a significant opportunity, with an estimated demand of over INR6,000 crores in stainless steel pipes over the next 4-5 years, where Venus Pipes aims to expand its current 15-20% market share.

While Q3 FY26 export growth was a modest 5% year-on-year, primarily due to a temporary decline in US contribution to total exports (from 20% to 12%), management is optimistic about a rebound. The recent resolution of Section 232 tariffs in the US is expected to stimulate new orders from the region in the coming quarters. Exports currently constitute over 30% of the total order book, with Europe being the largest market (60-65% of 9M FY26 exports), followed by the US (20-25%) and the Middle East/UAE/Saudi region (10-12%).

The company is focused on improving its EBITDA margin from the current 16.4% to a target of 18% by FY28, driven by a favorable product mix towards value-added offerings and enhanced capacity utilization. Capital expenditure for the new fittings business is approximately INR60 crores, with an expected asset turn of 3x-3.5x. Net debt stands at INR260 crores, and management anticipates only a marginal increase of INR10-20 crores in the coming quarter, demonstrating a disciplined approach to capital allocation and maintaining a healthy balance sheet.

Current capacity utilization remains healthy, with seamless pipes operating at over 90% and welded pipes at over 60%. The newly commissioned capacities are ramping up well. The major new capacities for fittings and seamless pipes are on track for commissioning by the end of March 2026, with full operationalization expected in FY27. These expansions are crucial for meeting the growing demand and strengthening the company's competitive position in the stainless steel pipes and tubes industry.