At a Glance
Venus Pipes is up 60% from its IPO price and has gone full throttle on capacity expansion, exports, and order wins. With FY25 revenue touching ₹959 Cr and PAT ₹93 Cr, the company boasts ROCE of 25.5% and OPM of 17%. But with P/E at 35x and cash flows under pressure, are valuations as stretched as its welded pipes?
1. ⚡ Introduction with Hook
In 2022, Venus Pipes was just another mid-sized stainless steel pipe maker going public.
Today?
- They’re exporting to 25+ countries
- Serving 70 Fortune 500 clients
- And bagging ₹190 Cr orders from power projects
Investors love the growth story. But with a P/E of 35 and valuation 6x book, is the stock riding high or pricing in future profits that haven’t been welded yet?
2. 🏭 Business Model – WTF Do They Even Do?
Core Business: Stainless steel pipes and tubes
🌍 Two Broad Categories:
- Seamless Tubes/Pipes
- Welded Tubes/Pipes
📦 Five Product Types:
- Heat exchanger & high precision tubes
- Hydraulic & instrumentation tubes
- Seamless pipes
- Welded pipes
- Box pipes
Applications:
- Oil & Gas
- Thermal & Nuclear Power
- Refineries
- Pharma, Breweries, Desalination, etc.
🎯 FY25 Capacity: 27,600 MTPA
🧪 Recent Addition: Value-added welded tubes (3,600 MTPA)
3. 📈 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 552 | 802 | 959 |
| PAT (₹ Cr) | 44 | 86 | 93 |
| OPM % | 13% | 18% | 17% |
| ROE % | 22% | 20% | 20% |
| EPS (₹) | 21.8 | 42.4 | 45.5 |
📈 5-Year Profit CAGR = 86%
💪 Solid ROCE and ROE make it one of the best performers in its niche.
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹1,575
- P/E: 34.6x
- Book Value: ₹260 → P/B = 6x
- Market Cap: ₹3,217 Cr
🧠 Let’s run a FV calc:
Assume 20% PAT CAGR → FY28E PAT ~₹190 Cr
Assign a terminal P/E of 25x → FV Range = ₹1,600 – ₹1,900
So yes, current price may look fully priced, but not delusional… unless PAT growth slows.
5. 🍿 What’s Cooking – News, Triggers, Drama
May–July 2025 Highlights:
- 🔥 ₹190 Cr boiler tubes order (thermal power segment)
- 🔧 New welded tube capacity of 3,600 MTPA added
- 🏗️ Total capacity: 27,600 MTPA now live
- 💰 FY25 revenue up 19.5%, PAT up 8%
- 🧾 ₹175 Cr capex announced for value-added pipes
- 📈 Export share increasing — focus on U.S., Europe
Upcoming triggers:
- Operating leverage from new capacity
- Expansion into higher-margin segments like duplex & super-duplex tubes
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Net Worth | ₹531 Cr |
| Borrowings | ₹164 Cr |
| Total Assets | ₹1,008 Cr |
| D/E Ratio | ~0.3 |
📉 Balance sheet is healthy, no signs of excessive leverage.
💸 Debt supports capex, but not dangerously so.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | ₹9 Cr | -₹167 Cr | ₹169 Cr | ₹11 Cr |
| FY24 | ₹52 Cr | -₹100 Cr | ₹38 Cr | -₹10 Cr |
| FY25 | ₹69 Cr | -₹114 Cr | ₹47 Cr | ₹2 Cr |
📦 Capex-heavy business → negative investing cash flow
✅ Positive CFO shows business is self-sustaining
🛠️ Working capital cycle needs improvement (CCC = 132 days)
8. 📐 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 25.6% |
| ROE | 19.8% |
| OPM | 17% |
| NPM | 9.7% |
| D/E | 0.3 |
| P/E | 34.6 |
| Interest Cover | ~3.5x |
| CCC | 132 |
✅ Efficiency is good
⚠️ CCC trending up due to high inventory days (196)
9. 📈 P&L Breakdown – Show Me the Money
| Line Item | FY25 (₹ Cr) |
|---|---|
| Sales | 959 |
| EBITDA | 168 |
| Interest | 34 |
| Depreciation | 19 |
| Other Income | 11 |
| PBT | 125 |
| PAT | 93 |
Consistent profitability + high margin business = investor confidence.
10. 🏁 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE % | OPM % | Mcap (₹ Cr) |
|---|---|---|---|---|
| Venus Pipes | 35x | 20% | 17% | ₹3,217 Cr |
| Ratnamani Metals | 38x | 16% | 16% | ₹20,555 Cr |
| Welspun Corp | 16x | 23% | 12% | ₹24,082 Cr |
| APL Apollo Tubes | 64x | 19% | 6% | ₹48,328 Cr |
👉 Venus is more profitable than many peers but still small in scale.
11. 📦 Miscellaneous – Shareholding, Promoters
| Category | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Promoters | 48.2% | 48.6% | 48.1% |
| FIIs | 5.8% | 5.1% | 5.8% |
| DIIs | 8.6% | 13.2% | 14.5% |
| Public | 37.4% | 33.0% | 31.6% |
🧳 Increasing DII stake is a green flag
📢 No major promoter dilution — skin still in the game
12. 🧑⚖️ EduInvesting Verdict™
Venus Pipes is:
✅ Efficient
✅ Fast-growing
✅ Well-run
✅ Export-friendly
But also:
⚠️ Fully priced (P/E 35x)
⚠️ Capex-heavy
⚠️ Valuation depends on execution
🚀 Verdict: “Steel body, clean books, boiler-hot momentum. But don’t expect molten returns unless earnings fire up even more.”
✍️ Written by Prashant | 📅 9 July 2025
Tags: Venus Pipes, stainless steel, industrial capex, boiler tubes, welded pipes, manufacturing India, midcap stocks, EduInvesting
