Strong Play on Capex Upcycle – Welding Consumables to Drive Growth: Currently, Ador Welding derives ~80% of its revenue from welding consumables segment with products ranging from electrodes, fluxes, flux cored wires to industries like Oil & Gas, Heavy Engineering, Shipbuilding, Power, Sugar, Construction, Railways and Automotive etc. We believe Ador Welding is well-placed to gain from overall infrastructure and manufacturing spending in India led by ‘Make in India’, ‘Aatmanirbhar Bharat’ and PLI schemes that will further boost the demand for welding consumables in the long-run.
We expect Ador Welding to benefit from the multi-year domestic capex upcycle as it caters to diverse capex led industries such as heavy engineering, infrastructure, construction among others. The company is the second largest player in the welding industry in India with a strong market share of ~16% in welding consumables space and ~8% market share in welding equipment space. We maintain our BUY rating on Ador Welding with TP of Rs1,621.
