Angel One sees value in Welspun Corp on pipe leadership; assigns 'Buy'

Brokerage firm Angel One has turned bullish on pipes manufacturer Welspun Corp and assigned a Buy rating on the stock. The brokerage cited the company’s leadership in large-diameter pipes across the US and India, strong utilisation visibility at its US operations through FY28, rising contribution from ductile iron pipes and building materials aiding diversification, and structural margin support from the introduction of new value-added products.

 

Angel One has set a target price of ₹1,050 based on a sum-of-the-parts valuation, implying an upside of 29 per cent from its previous close of ₹813.65 per share on the NSE.

Sector demand remains upbeat

According to Angel One, structural growth in global pipeline demand is being driven by the expansion of US LNG exports from 16 bcfd to over 25 bcfd over the next three years and the rapid rise of AI-led data centres. These data centres are estimated to require 8 to 10 bcfd of incremental natural gas and four to five dedicated gas pipelines, translating into 8,000 to 9,000 miles of new pipeline infrastructure over the medium term.

 

 

The brokerage further noted that sustained investments in water and energy infrastructure in Saudi Arabia and India underpin long-term sector visibility. Saudi Arabia’s Vision 2030 entails the development of 4,000 km of oil and gas pipelines, 2,000 km of large-diameter water transmission lines, and 200 KTPA of ductile iron pipe import substitution. This is in addition to continued investments in India’s gas grid expansion and large-scale water transmission and distribution projects.  CATCH STOCK MARKET LIVE UPDATES TODAY

Capex programme to drive long-term growth

Angel One expects Welspun Corp’s ₹5,500 crore capex programme over FY25 to FY27 to support capacity expansion and long-term growth. Of this, ₹1,800 crore has already been deployed, with the remaining expenditure planned to be largely funded through internal accruals, enabling the company to scale without putting pressure on its balance sheet.

 

“The current line pipe order book stands at approximately 1.3 million tonnes, with a balanced mix between India and the US, complemented by a ductile iron pipe order book of about 355 kt, which is expected to provide strong execution visibility. Recent US order wins of over $715 million are likely to ensure high mill utilisation through FY28, while the India order book should benefit from export demand and upcoming water infrastructure projects,” Angel One said in its report.

 

The brokerage also highlighted that the company is expanding capacity through two greenfield projects covering LSAW and ductile iron pipes, along with three new manufacturing plants under development with a combined capacity of 950 KMTPA. This expansion is expected to strengthen its ability to serve both energy and water infrastructure demand.

 

In parallel, the introduction of two new value-added product categories, anti-microbial and anti-rodent, has increased system offerings to seven. This is expected to support margin improvement over the next few quarters.

 

Angel One further noted that the company delivered Ebitda of ₹1,186 crore in H1 FY26, providing strong visibility towards management’s FY26 Ebitda guidance of ₹2,200 crore. “Operational momentum and healthy execution support this outlook. The company also expects to maintain ROCE above 20 per cent,” the brokerage said.

Key risks remain

However, Angel One cautioned that Welspun Corp’s performance remains dependent on the timely award and execution of large oil and gas and water infrastructure projects. Any slowdown in sector capex or challenges in ramping up new greenfield capacities could impact utilisation, margins, and returns, it added. 

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