Synopsis : Jefferies has initiated coverage on Welspun Corp with a ‘Buy’ rating and a Rs 3,250 target price, implying 27% upside. The brokerage sees three key growth triggers: strong US energy infrastructure spending, expanding capacity in Saudi Arabia and a robust order book that could support strong earnings growth through FY29.
Pipes don’t usually make headlines. But one pipe maker just did. Global brokerage Jefferies has given a ‘Buy’ rating on Welspun Corp, with a price target of Rs 3,250. That is a possible 27% upside from where the stock trades currently.
Jefferies sees capacity expansion, a large order book and a rising share of overseas business supporting earnings over the next three years.
What is Jefferies seeing in Welspun Corp that could drive the next leg of growth? Let’s take a look.
US oil and gas spending could drive demand
Welspun Corp is the world’s largest welded line pipe manufacturer, with a total pipe capacity of 2.4 million tonnes per annum. Around half of its EBITDA came from the US in FY26, with the rest coming from India.
Jefferies expects the US energy infrastructure cycle to remain strong for several years. Rising liquefied natural gas (LNG) exports, higher electricity demand from data centres and increasing gas output from the Permian Basin are all supporting investment.
The brokerage said, “US energy infrastructure is in a multi-year investment phase.”
Welspun already has around 30% market share in the US, with local manufacturing facilities and capacity expansion underway.
This gives the company exposure to continued spending on pipelines and other energy infrastructure as the US expands its energy production and export capabilities.
Saudi Arabia adds another growth engine
The second opportunity is Saudi Arabia.
The country is increasing spending on gas transmission and water infrastructure under its Vision 2030 programme. Jefferies believes growing local-content requirements could further support manufacturers with a domestic presence.
Welspun Corp has a 22% stake in Saudi-based pipe maker East Pipes Integrated Company (EPIC) and is also building 600,000 tonnes per annum of capacity through a wholly owned subsidiary in the country.
Jefferies described Saudi Arabia as a “Big opportunity”.
The brokerage believes this overseas expansion can increase Welspun’s contribution from higher-margin markets over time.
The Saudi expansion also gives Welspun a stronger position in a market where infrastructure investment is expected to remain significant.
Capacity expansion and order book can lift earnings
Jefferies expects Welspun Corp to deliver 17% volume growth and around 32-33% EBITDA and earnings per share (EPS) growth annually on a compounded basis between FY26 and FY29.
A major support is its Rs 42,100 crore order book, which is around 2.5 times FY26 revenue.
The brokerage expects capacity in the US and Saudi Arabia to expand by around 51%, while overseas operations contribute a larger share of profits.
Jefferies said, “We expect strong 33% EPS CAGR over FY26-29E led by capacity expansions, robust order book and improving mix, along with rising net cash and 23% ROE.”
The combination of a large order book and additional manufacturing capacity could provide greater revenue visibility over the coming years.
However, Jefferies is more cautious about the near-term outlook. Slower project execution and higher competition have affected demand visibility and margins compared with the US market.
That means execution will remain an important factor for investors to track.
Welspun Corp: Why does Jefferies see 27% upside?
Jefferies has set its target price at Rs 3,250, based on 17 times September 2028 estimated EV/EBITDA.
The brokerage believes the valuation is reasonable given the expected earnings growth, strong order book and high return on equity (ROE).
Jefferies said, “Initiate at Buy with a Rs3,250 PT, based on 17x Sep-28E EV/EBITDA, similar to its current 1-year forward multiple (potential 27% upside).”
The brokerage also expects Welspun Corp’s financial position to strengthen significantly.
Net cash is expected to increase from Rs 1,400 crore at the end of FY26 to Rs 3,900 crore by FY29, while ROE is expected to remain around 22-23%.
This combination of earnings growth, improving cash generation and strong returns could support the brokerage’s positive view on the stock.
What investors should watch
The investment case for Welspun Corp rests on three major factors.
First, continued investment in US energy infrastructure could support demand for line pipes.
Second, the company’s expansion in Saudi Arabia could increase its exposure to a growing infrastructure market and potentially improve its overseas earnings mix.
Third, its large Rs 42,100 crore order book and planned capacity expansion could provide visibility for revenue and earnings growth through FY29.
At the same time, investors will need to watch project execution, competition and margin performance, particularly in markets where demand visibility remains less certain.
Jefferies’ 27% upside target therefore depends not just on the company winning orders, but on Welspun converting those orders into profitable growth.
Conclusion
Welspun Corp is emerging as a key beneficiary of rising global energy and infrastructure spending, according to Jefferies.
The brokerage sees a multi-year opportunity in the US, where energy infrastructure investment remains strong, while Saudi Arabia provides another potential growth engine through its gas and water infrastructure spending.
With a Rs 42,100 crore order book, planned capacity expansion and expectations of strong EPS growth through FY29, Jefferies believes the company has several catalysts working in its favour.
However, project execution, competition and margins remain important risks.
Jefferies has initiated coverage with a ‘Buy’ rating and a Rs 3,250 target price, implying potential upside of around 27% from current levels.
Disclaimer : This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, estimates and recommendations expressed are those of the respective brokerage firms and do not reflect the views of Financial Express. This should not be construed as an offer, solicitation or recommendation to buy, sell or hold any security. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial adviser before making any investment decisions.
.jpg)