Haitong believes that robust growth will continue beyond FY27 for a longer duration, backed by opportunities particularly in oil & gas, semiconductors, and steel. Additionally, it believes that the company’s growth, visibility, and cash flow justify a premium valuation.
According to Haitong, Linde India’s Gas business has shown consistent margin improvement, with EBIT margins rising from 18.9% in CY19 to 25.7% in FY25, and revenue increasing from Rs 13.2 billion to Rs 20.4 billion. The EBIT margin on incremental revenue stood at an impressive 38%, highlighting strong operating leverage and efficiency gains from existing infrastructure.
Despite no new asset additions and the sale of two assets, revenue rose, and further upside is expected as new assets are commissioned. Haitong noted that Linde is investing in power cost reductions and pipeline infrastructure to support efficiency and margin expansion.
Total capex during FY25 stood at Rs 13.3 billion, including Rs 5–6 billion for two ASUs for Tata Steel. The overall capex plan of around Rs 32 billion is on track to more than double capacity (20,000 TPD) by FY26/FY27.
Also read: Reliance Power shares skyrocket 22% in 6 days. Should you book profits?Linde India posted a strong earnings beat in Q4FY25, with EBITDA margins expanding 720 bps YoY and 380 bps QoQ to 35.5%, while EBITDA rose 18% YoY to Rs 2,099 crore, beating the estimate of Rs 1,979 crore. The Gas business led the performance, as EBIT jumped 30% YoY and 19% QoQ to Rs 1,518 crore—its highest-ever EBIT margin of 29.4%.The improvement was driven by the commissioning of new ASUs, reducing reliance on traded gases. While PED EBIT dropped 29% YoY and 47% QoQ to Rs 192 crore (vs est. Rs 265 crore), margins on external sales held at 25%. Gas business revenue grew 4% YoY to Rs 5,159 crore, while PED revenue fell 43% to Rs 760 crore due to higher internal sales. Net PAT rose 12% YoY to Rs 1,184 crore, well above expectations (est. Rs 1,014 crore).
Around 1 pm today, the shares of Linde India were trading 6.3% higher at Rs 7,503 on the BSE.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
