Ellenbarrie Industrial Gases, one of India’s leading industrial gas companies and a recent market debutant, saw its shares rise 2.6% in intraday trade on Tuesday, September 9, to ₹552 apiece after Motilal Oswal gave a bullish outlook in its latest report.
Motilal Oswal cited robust capacity expansion, strong customer retention, and growing domestic demand for industrial gases as reasons to initiate coverage on the stock with a ‘buy’ rating and a target price of ₹680, implying an upside of around 26.4% from the previous close.
India’s industrial gas demand is projected to reach USD 1.75 billion by CY28 from USD 1.3 billion in CY24, at a CAGR of 7.5%, providing a favorable backdrop for Ellenbarrie’s expansion strategy.
Over FY23–25, the company expanded its capacity 4.5x to 3,870 tpd (led by an 18x increase in onsite capacity from 176 tpd in FY23 to 3,172 tpd in FY25) and plans to raise it further to 4,630 tpd by FY27 with new plants in East and North India. Motilal Oswal noted that strong execution, an in-house project engineering team, and a multi-vendor procurement strategy underpin Ellenbarrie’s growth prospects.
Steel, pharmaceuticals, and chemicals remain key growth drivers (contributing 37% and 26% of FY25 revenues, respectively), while healthcare accounts for 9%. Some of the company’s key customers include Tata Steel, NMDC, Dr. Reddy’s, Laurus Labs, Nueland, and Hindustan Shipyard.
The brokerage further highlighted future opportunities in electronics through high-purity gases, combined with capacity expansion in key clusters, which it expects to drive stable growth and margin expansion, and it forecasts revenue, EBITDA, and PAT CAGR of 39%, 49%, and 52% over FY25–28.
The company’s EBITDA grew at an 81% CAGR over FY23–25, with margins rising from 16.4% in FY23 to 35.1% in FY25. Motilal Oswal expects the strong trajectory to continue at 39–43% in FY26–28, driven by higher contributions from argon, green energy initiatives, operating leverage, and improved energy efficiency at new plants.
The company expects Argon’s revenue share to rise to 15% once larger-capacity plants (above 150 tpd) become fully operational, up from 9% in FY25.
According to the brokerage, the stock is currently trading at 49.8x, 30.6x, and 25x FY26E, FY27E, and FY28E PE, with RoE/RoCE of 20.7% and 19.6% in FY27E and 20.6% and 20.1% in FY28E.
Stock trades 38% above IPO price
The company made its stock market debut in July 2025, listing at ₹486, a 23% premium over the issue price of ₹400. The stock maintained its momentum in the following weeks, hitting ₹637 before witnessing a sustained decline through August.
However, it has since recovered and is currently trading 38% above its issue price. Ellenbarrie Industrial Gases (ELLEN), one of India’s oldest industrial gas companies with a legacy of over 50 years, manufactures and supplies oxygen, nitrogen, argon, hydrogen, and other gases such as carbon dioxide, acetylene, nitrous oxide, and helium.
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