Linde India's Stock Surge Continues: Jumps 16% in 2 Days on Indian Oil Agreement

Linde India share price surged to an all-time high of ₹6,075.05 on the BSE, riding on the company's recent achievement - securing a 'Letter of Acceptance' from Indian Oil Corporation Limited (IOCL). This contract win is set to establish an Air Separation Unit (ASU) within IOCL's Panipat Refinery Complex, designed to produce and supply instrument air, plant air, and cryogenic nitrogen for the IOCL Panipat Refinery Expansion Project (P25).

Upon completing the ASU construction and passing the performance test, Linde India will enter into essential agreements with IOCL, entailing the operation and maintenance of the facility for a substantial 20-year duration from the initial delivery date. Linde India is confident in funding the capital expenditure using its internal accruals and resources. 
In an impressive showcase of their capabilities, Linde India's stock price soared by 5% in Wednesday's intra-day trading, breaking new ground at ₹6,075.05. This performance stands out, particularly as the S&P BSE Sensex slightly dipped to 65,176 around 09:30 AM.

Linde India's Exchange Filing stated, "The company has been awarded a 'Letter of Acceptance' dated August 22, 2023, by Indian Oil Corporation Limited (IOCL) in connection with the job-work contract for setting up an Air Separation Unit (ASU) on a site licensed by IOCL within its Panipat Refinery Complex for the production and supply of Instrument Air, Plant Air, and Cryogenic Nitrogen to IOCL Panipat Refinery Expansion Project (P25)."

A Diverse Portfolio Brings Success

Linde India's remarkable stock growth for the year 2023, an astounding 70%, stands in contrast to the S&P BSE Sensex's more modest 6.6% increase. Anchored by a rich legacy of over 75 years, Linde India has solidified its stature in the domestic industrial gas industry, marked by a comprehensive product lineup encompassing industrial, medical, compressed, and specialty gases. This diversity is amplified by their robust brand recognition and their capacity to offer holistic solutions in the tonnage segment.

Strengthening Presence in the Steel Sector

Linde India has secured significant orders for Air Separation Units (ASUs) from ESL Steel Limited and Jindal Stainless Limited, strengthening its foothold in the steel sector in East India. These ventures boast a combined capacity of about 2,200 tons per day (tpd). In the past year, the company received investment approvals for new ASUs in Dahej and Ludhiana, catering to the secondary steel, metfab, and pharma markets. These investments, approximately 500 tpd each, are expected to be commercialized within the current fiscal year 2023.  These steps affirm Linde India's commitment to industry leadership and innovation.

Driving Growth in Semiconductor Segment

Linde India's strategic diversification extends into the semiconductor sector as well. The company is in the process of establishing a high-purity Nitrous Oxide facility at its existing Hyderabad plant, aimed at reinforcing its presence in this critical market.

Resilience Amidst Pandemic

During the challenging times of the Covid-19 pandemic, Linde India's stock showcased impressive resilience. Notably, it skyrocketed by a staggering 15 times from its low of ₹378 on March 24, 2020.

Consistently Strong Performance

Linde India's financial performance over the years has been consistently strong. With a positive annual return in seven out of the last eight years, the only exception was a marginal drop of 2.7% in 2019.

Vision and Priorities for the Future

Linde India is planning for the future by looking at various growing industries. They expect the healthcare and steel industries to get bigger, which means more demand for their gases. They are also interested in the pharmaceutical, chemicals, paints, railways, and defense sectors, as well as providing gases to construction sites. Additionally, they are actively looking for opportunities to merge or acquire other companies in the bulk gas business.

Transformation: BOC to Linde India

Marking a significant transformation, the company underwent a name change from BOC India to Linde India in 2013 following the acquisition of BOC by Linde Plc. Notably, BOC remains a strong stakeholder with a 75% shareholding, continuing to hold the position of a promoter.

Financial Performance

Linde India's financial performance for the first quarter of FY24 is noteworthy. Reporting a revenue of ₹721 crore, this figure demonstrates growth from ₹630 crore in the preceding quarter. In terms of net profit, the company maintained stability, with ₹99 crore for the June quarter, compared to ₹98 crore sequentially.