Shares of Venus Pipes and Tubes Ltd, a leading stainless steel pipes and tubes manufacturer and exporter in India, surged nearly 10% in trade on Friday after the company announced its earnings for the second quarter ended September 2023 (Q2 FY24).

Share Market Live

NSE

Benefits of the recent capacity expansion and backward integration showed in the company’s quarterly results, with Venus Pipes reporting a 94% jump in its profit after tax (PAT) at ₹20.2 crore compared with ₹10 crore in the year-ago quarter.

Backward integration is when a company purchases another company that supplies the products or services required for its production.

Venus Pipes said that its total sales in the second quarter this fiscal jumped 51.3% to ₹191.3 crore, compared to ₹126.4 crore in the same period last year. Of this, sales of stainless steel seamless pipes witnessed a growth of 153% year-on-year to ₹108.3 crore, while those of welded pipes grew 1.4% to ₹77.5 crore.

In a stock exchange filing, Venus Pipes said that volume for seamless pipes witnessed a growth of more than 100% and welded pipes witnessed a growth in high teens for the September quarter, compared to the same period last year.

Exports made up around 15% of the total revenue for the second quarter compared with 5% a year ago, standing at ₹28.5 crore in the second quarter compared with ₹1.6 crore last year.

Venus Pipes also posted best-ever profit margin at 18.1% in the quarter under review compared with 11.95% last year and 15.4% in the first quarter this fiscal. The company said that it reported a positive net cashflow from operations of ₹6.5 crore for the first half of this fiscal.

Also Read: What investors should do after Asian Paints misses Q2 estimates — buy, sell or hold?

After the announcement, the Venus Pipes stock gained as much as 10% to hit an intra-day high of ₹1,418.80 apiece on BSE on Friday, October 27. The rally was mainly triggered by prospects of an even better second half this fiscal for the company.

Arun Kothari, managing director, Venus Pipes and Tubes Ltd, said, “Historically, the second half has been a stronger half of the year, and we are optimistic of the same for this year as well. Our growth trajectory remains strong as we actively pursue expansion into new sectors and geographies.”

The company also said that the planned capex to add an additional 400 tonne per month of seamless pipes is on schedule and is poised for completion by Q4 FY24.

Shares of Venus Pipes were trading 9.47% higher at Rs ₹ 1406.95 apiece on BSE at 10:10 AM.

Also Read: Vodafone Idea will make significant investments for 5G rollout, says Kumar Mangalam Birla

(Edited by : Shloka Badkar)