Ellenbarrie Industrial newly rated 'Buy' at JM Financial; 19% upside seen

JM Financial Services has initiated coverage on Ellenbarrie Industrial Gases with a ‘Buy’ rating, with a target of ₹550 per share, implying 19 per cent upside from current levels.

 

At 11:16 AM, Ellenbarrie Industrial Gases shares were trading 0.87 per cent higher at ₹460.5 per share. In comparison, BSE Sensex was down 0.25 per cent at 82,124.67.

 

Ellenbarrie Industrial Gases made a strong stock market debut on July 1, 2025, listing at ₹492 per share on the BSE, registering a premium of ₹92 or 23 per cent over the issue price of ₹400. On the National Stock Exchange (NSE), the stock opened at ₹486, also reflecting a premium of ₹86 or 21.5 per cent to the IPO price.

 

Why is JM Financial bullish on Ellenbarrie Industrial Gases?

Capacity expansion to fuel volumes and national footprint

The company is building three Air Separation Units (ASUs), which will lift total installed capacity to 2,121 tonnes per day (TPD) by Q1 FY27 from 1,361 TPD currently, according to the brokerage. Merchant volumes are projected to grow at a 29 per cent CAGR over FY25–28, aided by capacity additions and deeper regional penetration. The company is actively scouting further projects in West India, underscoring its ambition to transition from a regional champion to a pan-India player.

Margin expansion anchored by argon

High-margin argon production is expected to rise at an 83 per cent compound annual growth rate (CAGR)—from about 9 TPD in FY25 to over 50 TPD by FY28—as new plants come onstream, noted JM Financial.

 

Given argon’s Earnings before interest, tax, depreciation and amortisation (Ebitda) margin profile (70–80 per cent) versus oxygen and nitrogen (30–35 per cent), consolidated Ebitda margin is projected to expand to 38 per cent in FY28, up from 35 per cent in FY25 and 24 per cent in FY24.

Competitive edge in an MNC-dominated industry

The company has carved a robust competitive advantage through regional focus and agile customer engagement—building plants closer to end-users, customising offerings and targeting underserved regions.

 

These strengths, combined with policy tailwinds (Make in India, Aatmanirbhar Bharat, PLI schemes and import substitution), position EIGL to convert sector growth into sustained gains in revenue and profitability, believes JM Financial.

 

Outlook

Analysts expect Ellenbarrie to deliver FY25–28 CAGR of roughly 30 per cent in revenue, 34 per cent in Ebitda and 32 per cent in PAT, driven by: 29 per cent CAGR in merchant volumes from capacity expansion, and Ebitda margin improvement to 38 per cent on a richer argon mix.