Ventura Securities Research team writes on Ador Welding,
Ador Welding Limited, one of the leading players in the welding consumables & equipment space is all set to benefit from a pick up in the investment cycle in the core infrastructure space resulting in strong demand outlay for its welding products. AWL is expected to exhibit a revenue & PAT CAGR of 24% & 26% for the period FY10-12 respectively on the back of strong volume growth of 25% and capex in continuous welding equipment which is margin accretive.
Key Investment Highlights:
1- Volume expansion: key growth driver
2- Capex in continuous welding segment to fuel further growth
3- Uptick in infrastructure spending spells good opportunity for welding players
4- Clean balance sheet, Zero Debt Company with attractive return ratios
We value AWL at 10x its FY12e earnings and initiate a BUY at CMP with a price target of Rs 298, representing a potential upside of 42% over a 15-18 months horizon.
