Venus Pipes

Venus Pipes reported a strong financial year 2025, with total revenue growing by 19.5% to INR 958.5 crores, up from INR 802.2 crores in FY24. A significant driver of this growth was the export business, which expanded over three times from INR 98.7 crores in FY24 to INR 338 crores in FY25, accounting for approximately 35% of the total revenue. This strong export performance helped offset some pressure faced by domestic sales due to subdued capital expenditure.

The company achieved a key milestone by commencing operations for 3,600 metric tons per annum of value-added welded tubes, marking its entry into a higher-value product segment. This expansion is part of a broader capex plan initiated in February 2024. Furthermore, Venus Pipes secured a major order worth INR 190 crores for stainless steel seamless boiler tubes, expected to be executed over the next 12 to 15 months, bolstering its order book which currently stands at approximately INR 575 crores.

In FY25, seamless pipes contributed INR 543 crores to revenue, growing 18%, while the welded pipe business contributed INR 350 crores, growing 12%. Overall volume growth was 17%, with seamless pipes growing 25% and welded pipes 10%. The company's EBITDA for FY25 grew 14.6% to INR 167.6 crores, with a margin of 17.5%. However, Q4 FY25 saw a slight dip in EBITDA to INR 41.6 crores (16.1% margin) and PAT to INR 23.7 crores (9.2% margin), partly due to competition intensity in the welded segment and strategic investments in manpower and backward integration.

Management provided an optimistic outlook, guiding for a top-line growth of over 20% for both FY26 and FY27. They expect to maintain an EBITDA margin in the range of 16-18% for the next 2-3 financial years. Blended capacity utilization is projected to reach approximately 80% in FY26, with seamless capacity utilization exceeding 85-90%. The company plans a capex of around INR 120 crores for FY26, primarily for value-added products and fittings, with FY27 capex expected to be predominantly for maintenance.

Venus Pipes continues to focus on diversifying its market reach, with exports primarily to Europe, USA, Middle East, and African countries, aiming to maintain an export mix above 30%. The company is actively pursuing specific approvals for global supplies and expanding its presence in critical industries such as nuclear energy, renewables, power, and semiconductors. This strategy, coupled with a focus on value-added products, is expected to enhance differentiation and improve margins, with value-added welded products potentially yielding 2-5% higher margins.

Management addressed analyst concerns regarding significant increases in other expenses, finance costs, and employee costs, attributing them to strategic investments in backward integration, new product manufacturing, and manpower. They guided that the blended ratio of other expenses plus employee cost should remain in the 16-18% range. While domestic sales were subdued in FY25, the company noted recent substantial domestic order wins and anticipates a recovery in the domestic market in the coming year.