Accumulate Ador Welding; target of Rs 1806: Asit C Mehta

Asit C Mehta report on Ador Welding

Ador Welding was established in 1951. Ador (formerly known as AdvaniOerlikon) is one of the leading welding companies in India, manufacturing highquality welding equipment, consumables, and welding automation solutions. Additionally, Ador has been in the Flares & Process Equipment Division for more than 30 years. The company has three manufacturing plants: the Chinchwad Plant (Welding Equipment Plant), the Raipur Plant (Welding Consumables Plant), and the Silvassa Plant (Welding Consumables Plant). The company also boasts a strong distribution network with over 300 distributors selling its products to more than 70 countries. ADOR Welding brought hope to India by offering high-quality welding products. Before ADOR, people had to buy European products even after independence. They focus on customer satisfaction, efficient delivery, and sharing welding expertise. They also manufacture products for various industries and have expanded globally. ADOR prioritizes innovation, customer feedback, and industry education. They maintain their leadership position by understanding their strengths and meeting customer expectations. They engage with distributors and customers directly, ensuring their products align with customer needs.

Outlook

We estimate the company’s top line to grow at a CAGR of approximately 10.8% during FY23- FY26E, driven by an increase in volume. By applying a PE multiple of 28x to FY26E EPS of Rs 64.51, we arrive at a target price of Rs 1,806, indicating a 20% upside from the current levels. Therefore, we recommend an ACCUMULATE rating for a medium to long-term perspective.

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Ador Welding - 04032024 - ac