Shares of Welspun Specialty Solutions have rocketed over 170% in the past six months, but analysts at Ventura think the stock run further up as demand for stainless steel products increases.

The Welspun Specialty Solutions Analyst: Analysts at Ventura initiated coverage on the stock with a ‘buy’ rating. The brokerage has set a price target of ₹62 in the next 24 months. The price indicates an upside of around 55% from the stock’s last closing price of ₹40.39.

The Welspun Specialty Solutions Thesis: The firm noted that after the post-Covid restructuring by new promoter Welspun Corp Ltd, Welspun Specialty Solutions Ltd has become a key supplier of stainless steel products like bars and seamless pipes in India.

The brokerage added that growing demand for stainless steel in sectors like railways, oil & gas, and construction is driving domestic market growth. The firm also highlighted that the company does not have intense competition and that bodes well for the stainless steel producer as it aims to raise capacity utilisation from 7.3% to 30% by FY26.

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The analysts see the company’s sales volume growing at a 100.1% compound annual growth rate (CAGR) to 87,500 tons. As per the domestic brokerage, the company’s revenue and EBITDA will grow at 79.9% CAGR to ₹2,431 crore and 141.3% CAGR to ₹235 crore respectively by FY26E.

The company is actively expanding into emerging and developed markets like the US, Europe, the Middle East, and East Asian/Southeast Asian regions, the firm added in its note. The note further noted that in the June quarter, the company displayed its products at expos in the Czech Republic and Italy, securing significant new export orders. As per the brokerage, this expansion strategy aims to increase the company’s customer base and drive revenue growth across new territories.

Price Action: Welspun Specialty Solutions’ share price was down 3.44% to trade at ₹39 in early trade on Thursday.

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