Summary
Venus Pipes and Tubes Limited - Q3 FY 2026 Earnings Call Summary Thursday, February 05, 2026, 4:00 PM IST
Event Participants
Executives Arun Kothari (Chairman & Managing Director), Dhruv Patel (Whole Time Director), Kunal Bubna (Chief Financial Officer)
Analysts Aasim Bharde (DAM Capital), Bhargav (Ambit Asset Management), Dhananjai Bagrodia (Alchemy), Dhruv Jain (Ambit Capital), Pallav Agarwal (Antique Stock Broking), Pritesh (Lucky Investments), Romil (Electrum PMS), Sahil Sanghvi (Monarch Networth Capital), Sonal Minhas (Prescient Capital), Shubham Thorat (Perpetual Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹296.7 crores | +28.3% YoY; All-time high quarterly revenue driven by 43% YoY growth in domestic sales. |
| EBITDA | ₹48.8 crores | +31% YoY; Growth supported by higher domestic demand and efficient capacity ramp-up. |
| EBITDA Margin | 16.4% | +30 bps YoY; Margins remained resilient despite shifts in geographic mix. |
| PAT | ₹25.6 crores | +42% YoY; Strong bottom-line growth despite a ₹0.65 crore one-time impact from labor code changes. |
| Order Book | ₹470 crores | Increased from <₹350 crores YoY; Comprises >30% exports and <70% domestic orders. |
| Segment: Seamless | ₹178 crores (approx) | +43% YoY; Now contributes 60% of total revenue as the company shifts toward higher-value products. |
| Segment: Welded | ₹100.9 crores (approx) | +13% YoY; Growth moderated due to lower exports to the USA, now 34% of revenue. |
| Net Debt | ₹260 crores | Reflects ongoing capex for fittings and seamless capacities; expected to peak around ₹280 crores. |
Geographic & Segment Commentary
- Domestic Market: Revnue grew 43% YoY to ₹203 crores, representing a sequential increase of over 15%. Growth is significantly driven by a shift from unorganized players and strong demand from the power, oil & gas, and engineering sectors.
- Exports: Contributed 31.5% of revenue at ₹93.5 crores, up 5% YoY. The regional mix shifted as US sales declined to 12% of exports (down from 20%+), while Europe remained dominant at 60-65% of the export basket.
- Seamless & Welded: Seamless pipes achieved 90%+ capacity utilization, while Welded stood at 60%+. The company is transitioning toward value-added welded products (e.g., condenser tubes) and advanced seamless grades.
Company-Specific & Strategic Commentary
- Value-Added Products (VAP): VAP currently contributes 15-20% of revenue. Management expects this to double following the commissioning of fittings and specialized seamless lines, targeting an 18% EBITDA margin by FY28.
- Fittings & Seamless Expansion: A ₹60 crore investment in the fittings business is expected to go live by March 2026. Management targets an asset turnover of 3x-3.5x for this segment, with 50% utilization expected in FY27.
- Power Sector Opportunity: Management estimates a ₹6,000 crore market opportunity in the Indian power sector over the next 4-5 years. Venus holds a 15-20% market share in recent BHEL/NTPC tenders.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | >20% YoY for FY27 | Driven by full-year contribution from new fittings and seamless capacities. |
| EBITDA Margin | ~18% by FY28 | Expected expansion from current 16.4% as the product mix shifts toward VAP and fittings. |
| Asset Turnover | 3.0x to 3.5x | Target for new capex in value-added welded tubes and fittings segments. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical & Trade | While US tariff clarity recently improved, past uncertainty regarding Section 232 duties led to a temporary decline in US export volumes. |
| Regulatory Compliance | CBAM (Carbon Border Adjustment Mechanism) implementation requires complex precursor emission tracking from suppliers; formulas were revised as recently as Dec 2025. |
| Competition | While new seamless capacities are entering the market, Venus mitigates this through backward integration and specialized approvals in nuclear and oil & gas sectors. |
Q&A Highlights
The Power Sector Opportunity
- Question: What is the scale of the BHEL/NTPC opportunity? (Bhargav)
- Answer: Estimated demand of 80,000 metric tons (~₹6,000 crores) over 5 years. Only 5-7 approved domestic players exist; Venus currently has 15-20% share and expects to increase this with newly commissioned condenser tube capacities (Arun Kothari).
US Export Dynamics
- Question: Why did export growth slow down this quarter? (Dhruv Jain)
- Answer: Primarily due to tariff uncertainty in the US which reduced buyers’ confidence. With the recent “ease of tariff” deal and clarity on Section 232, management expects a volume recovery in coming quarters (Kunal Bubna).
Value-Added Product (VAP) Ramp-up
- Question: What is the revenue potential of the new fittings and value-added lines? (Pritesh)
- Answer: The value-added welded and fittings lines have a combined peak revenue potential of ~₹350 crores. For FY27, management targets ~80% utilization for new seamless and ~70% for value-added welded (Kunal Bubna).
Margin Trajectory
- Question: Can margins return to the 18% level? (Pallav Agarwal)
- Answer: Yes, the current 16.3% (9M) is a transition phase. As fittings, BA tubing, and condenser tubes scale by FY27-28, the higher-margin VAP mix will drive EBITDA toward 18% (Kunal Bubna).
Key Takeaway
Venus Pipes and Tubes delivered an all-time high quarterly revenue of ₹296.7 crores in Q3 FY26, representing 28.3% YoY growth. The performance was anchored by the domestic segment, which grew 43% YoY, offsetting a temporary slowdown in US exports caused by trade tariff uncertainties. Strategically, the company is pivoting toward a higher-margin profile, with the value-added product (VAP) share expected to double from the current 15-20% as new fittings and specialized seamless capacities commission by March 2026. Management has guided for 20%+ revenue growth in FY27 and an EBITDA margin expansion to 18% by FY28. Key watch items include the successful ramp-up of the ₹6,000 crore power sector tender pipeline and navigating CBAM compliance for European exports. Venus remains well-positioned to benefit from the shift toward organized domestic manufacturing and expanding global certifications in the nuclear and oil & gas sectors.
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