Motilal Oswal has initiated coverage on Ellenbarrie Industrial Gases, a recently listed manufacturer and supplier of gases for various sectors, assigning a Buy rating with a target price of Rs 680, a 30 percent upside from the last closing price.
Shares of Ellenbarrie are higher by close to two percent in trade on September 9, and since listing in July 2025, it has been flattish with a 2.2 percent loss.
Ellenbarrie has a market capitalisation of over Rs 7,700 crore, and for the June quarter, the company posted a 24 percent on-year growth in revenue and almost 40 percent rise in in EBITDA. EBITDA margins for the quarter came in at about 37 percent, which the management said may improve further going ahead. MOSL has projected a revenue and PAT CAGR of 39% and 52% respectively over FY25-28, supported by argon contribution, green energy push, and capacity addition.
The company said it is expecting one of its merchant plants in East India to commence operation from October 2025, and another on-site plant from March 2026. Ellenbarrie is looking at building additional merchant and on-site capacities for its core business of ASU gases.
Ellenbarrie makes and supplies oxygen, nitrogen, argon, hydrogen, helium, and carbon dioxide to a range of sectors such as steel, pharma, healthcare, engineering, defense, energy, and food & beverages, with recurring demand and a long-term clientele.
The company has been focusing on geographical expansion. "Our focus shall be on geographical expansion as well and we hope to be a Pan-India company very shortly. We are looking at inorganic growth in synergistic areas, acquisition of our cylinder filling assets in Bangalore is a move in that direction," said Padam K Agarwala, the CMD of the company had said during the June earnings call.
MOSL in its note said that it sees India's industrial gas demand reaching $1.75 billion by CY28 from $1.3 billion in CY24 at a CAGR of 7.5 percent.
"The company has scaled its capacity 4.5x over FY23-25 to 3,870 tonne per day (TPD), led by 18x growth in onsite capacity from 176 TPD in FY23 to 3,172 TPD in FY25. Ellen aims to increase its capacity to 4,630 TPD by FY27," MOSL note mentioned.
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