Electrosteel Castings - Facilitating The Connectivity Of Profitability: Anand Rathi Initiates Coverage

Anand Rathi Report

We believe that Electrosteel Castings Ltd.'s revenue/Ebitda/profit after tax is expected to grow at a compound annual growth rate of 7%/24%/48% respectively over FY23-25E.

On valuation front, at current market price, the stock is trading at 12 times of FY25E earnings per share. We initiate the coverage with a “Buy” rating on this stock by assigning 16 times of FY25E earnings with a target price of Rs 185.

Electrosteel Castings is an India-based pipeline solution provider. The company is engaged majorly in the business of manufacturing ductile iron pipes, ductile iron fittings and cast iron pipes. Its products also include ductile iron flange pipes, restrained joint pipes, cement and ferro alloys.

The company operates through pipes and fittings segment. The company's products DI pipes and DIF are used for various applications, such as water transmission and distribution, desalination plants, storm water drainages and sewage treatment plants.

The company’s manufacturing facilities are spread across five locations in India, out of which three are located in West Bengal, each in Tamil Nadu and Andhra Pradesh.

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