WOKING, UK - Linde (NASDAQ:NYSE:LIN), a global industrial gases and engineering company, has announced a strategic expansion in India by signing agreements to acquire two air separation units (ASUs) and to increase its supply of industrial gases to Tata Steel Limited in Odisha, India. This move is aimed at supporting Tata Steel's capacity expansion at the Kalinganagar Industrial Complex.
The acquisition of the two large ASUs, which are currently under construction, is expected to more than double Linde's on-site production capacity once the transfer is completed in 2025. Linde has also secured a long-term agreement with Tata Steel for the supply of oxygen, nitrogen, and argon, essential for steel manufacturing processes.
In alignment with Linde's commitment to environmental sustainability, the company has arranged agreements for the supply of renewable energy to the plant. This initiative is part of Linde's broader goal to reduce Scope 2 greenhouse gas (GHG) emissions by 2035.
Moloy Banerjee, President ASEAN & South Asia at Linde, highlighted the significance of the agreement, stating, "The new agreements to support Tata Steel's major capacity expansion build on our existing long-term relationship and further strengthen our position as a supplier of critical industrial gases to the steel industry." Banerjee emphasized that the project aligns with Linde's investment criteria and is expected to contribute to sustainable growth for the company while enhancing its network density in a key industrial region of India.
Linde, with sales of $33 billion in 2023, serves diverse end markets including chemicals & energy, food & beverage, electronics, healthcare, manufacturing, and metals and mining. The company's industrial gases and technologies are integral to applications such as clean hydrogen production, carbon capture systems, medical oxygen, and high-purity gases for electronics manufacturing. Linde's gas processing solutions also support customer expansion, efficiency improvements, and emissions reductions.
The information in this article is based on a press release statement.
In other recent news, Linde, the industrial gas giant, has been making significant strides. The company reported record second-quarter earnings per share (EPS) of $3.85, surpassing estimates from various financial firms. Deutsche Bank, BMO Capital Markets, and JPMorgan have all increased their price targets for Linde, reflecting confidence in the company's growth trajectory. Linde's management has also highlighted the company's new clean hydrogen contract with Dow, indicating potential for expansion as the market evolves.
Despite the challenging macroeconomic environment, Linde is predicted to maintain its growth trajectory, with BMO Capital forecasting a 9% and 10% increase in earnings per share (EPS) for the years 2024 and 2025, respectively. Analyst notes from Deutsche Bank and JPMorgan have also mentioned Linde's potential for volume recovery as a key factor for the company's future growth.
In addition to these developments, Linde's Annual General Meeting approved executive pay, the election of directors, and the ratification of PricewaterhouseCoopers as the independent auditor. For 2024, Linde's full-year EPS guidance is set between $15.40 and $15.60. These recent developments reflect the company's strategic positioning and financial discipline in the industrial gas market.
InvestingPro Insights
Linde's strategic expansion in India aligns well with its position as a prominent player in the Chemicals industry, as highlighted by InvestingPro Tips. The company's move to acquire two air separation units and increase its supply to Tata Steel demonstrates its commitment to growth in key markets.
According to InvestingPro data, Linde's revenue for the last twelve months as of Q2 2024 stood at $32.82 billion, with a robust gross profit margin of 47.56%. This financial strength supports the company's ability to undertake significant expansions like the one in India.
InvestingPro Tips also reveal that Linde has raised its dividend for 32 consecutive years, indicating a strong track record of returning value to shareholders. This consistent dividend growth, coupled with the company's strategic expansions, may appeal to long-term investors.
The company's focus on environmental sustainability in the Indian project aligns with its overall financial health. InvestingPro data shows an EBITDA of $12.4 billion for the last twelve months as of Q2 2024, with an EBITDA growth of 8.66%. This financial performance provides Linde with the resources to invest in renewable energy initiatives and support its goal of reducing Scope 2 greenhouse gas emissions.
It's worth noting that InvestingPro lists 12 additional tips for Linde, offering investors a comprehensive view of the company's financial health and market position. These insights can be valuable for those considering investment in Linde as it continues its global expansion and sustainability efforts.
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