ADOR - Ador Welding

📊 NSE: ADOR 🏢 Other Industrial Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

In FY24, the Consumables division grew 10% YoY, while the Equipment division saw a significant 52% increase to INR 175.21 Cr. Conversely, the Services/Flares & Process Equipment division declined 26.5% from INR 47.23 Cr to INR 34.72 Cr due to execution delays. For Q2 FY26, overall sales grew 5% YoY to INR 280 Cr.

Geographic Revenue Split

India and the Middle East represent 97-98% of the total market. Export sales grew by 69% in FY24, reaching INR 120 Cr compared to INR 71 Cr in the previous year, driven by expansion into new international markets.

Profitability Margins

Gross margins improved to 32.7% in Q2 FY26 from 27.8% in Q2 FY25. PBT margins for Q2 FY26 stood at 12.2%, up from 7.6% YoY. The improvement is attributed to a better product mix and a correction in steel prices which reduced input costs.

EBITDA Margin

EBITDA margin for Q2 FY26 was 12.5%, representing a 500bps increase from 7.7% in Q2 FY25. This was driven by higher operational efficiencies and the stabilization of the welding business following the merger.

Capital Expenditure

While specific future INR figures are not disclosed, the company recently integrated three manufacturing plants (two in Bengaluru, one in Nagpur) following the Ador Fontech merger, bringing the total to five major facilities with a capacity of 90,000 MT for consumables.

Credit Rating & Borrowing

The company maintains a CARE A+ (Stable) rating for long-term facilities and CARE A1+ for short-term facilities. Interest coverage is exceptionally strong at 29 times as of FY24, with a low overall gearing of 0.09x.

⚙️ Operational Drivers

Raw Materials

Steel is the primary raw material, accounting for a significant portion of the cost of goods sold. Other materials include components for welding equipment and power sources.

Import Sources

Not specifically disclosed, though the company operates five manufacturing facilities across India and serves the Middle East market.

Capacity Expansion

Current installed capacity stands at 90,000 metric tons for welding consumables and 30,000 units for welding equipment and power sources. The merger with Ador Fontech added three manufacturing units to the operational footprint.

Raw Material Costs

Raw material costs are highly sensitive to steel prices. A correction in steel prices in Q2 FY26 directly contributed to the gross margin expansion to 32.7%. Procurement is managed to maintain a 47-day inventory cycle.

Manufacturing Efficiency

The company is consolidating manufacturing units following the merger to achieve cost efficiencies and operational synergies in the maintenance and reclamation (M&R) business.

Logistics & Distribution

The company utilizes a comprehensive network of over 300 distributors to sell products across multiple countries, ensuring deep market penetration in the organized welding segment.

📈 Strategic Growth

Expected Growth Rate

10%

Growth Strategy

Growth will be achieved through the integration of Ador Fontech Limited to capture M&R market share, expanding the product portfolio into robotic solutions and cobots, and increasing export presence beyond the current INR 120 Cr level.

Products & Services

Welding consumables (electrodes, wires), welding and cutting equipment, gas cutting products, welding automation systems (WAPS), personal protective equipment (PPE), and flares/process equipment.

Brand Portfolio

Ador, Ador Welding.

New Products/Services

The company is launching robotic solutions and cobots to modernize its portfolio, targeting high-tech industrial segments to improve overall blended margins.

Market Expansion

Targeting growth in the Middle East and expanding the export basket, which recently grew to INR 120 Cr, while leveraging the 300+ distributor network.

Market Share & Ranking

Ador is a Tier 1 welding manufacturer in India and the Middle East, holding a leading position in the organized market for consumables and equipment.

Strategic Alliances

The merger with Ador Fontech Limited (AFL) is the primary strategic move, aimed at consolidating the maintenance and reclamation business and achieving manufacturing synergies.

🌍 External Factors

Industry Trends

The industry is shifting toward automation and robotics. Ador is positioning itself by adding cobots to its portfolio to move away from traditional manual welding products.

Competitive Landscape

Competes in the organized welding market against both domestic players and MNCs, maintaining a Tier 1 status through a diversified product basket.

Competitive Moat

Ador's moat is built on its 70-year brand legacy, a massive 300+ distributor network, and its status as the only major Indian welding brand not linked to a multinational corporation (MNC).

Macro Economic Sensitivity

Highly sensitive to industrial CAPEX cycles and infrastructure spending in India and the Middle East, which drives demand for welding equipment.

Consumer Behavior

Industrial customers are increasingly demanding integrated automation and safety equipment (PPE) alongside traditional consumables.

Geopolitical Risks

Management cited international factors as a reason for uncertainty in the H2 FY26 outlook, potentially affecting global supply chains and export demand.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to manufacturing standards for welding equipment and safety gear. The company must adhere to BIS (Bureau of Indian Standards) requirements.

Environmental Compliance

The company complies with Business Responsibility and Sustainability Reporting (BRSR) and National Guidelines on Responsible Business Conduct (NGRBC).

Legal Contingencies

A BIS-related matter is currently pending judgment before the Bombay High Court. Additionally, the company received a query from the NSE in February 2025 regarding Corporate Governance disclosures for the December 2024 quarter.

⚠️ Risk Analysis

Key Uncertainties

The project business (Services) requires INR 15-20 Cr in quarterly revenue to breakeven; failure to reach this scale results in operating losses that drag down consolidated PAT.