This stock just beat AI star HFCL’s 230% rally to top Nifty 500 gainers in 2026. Can outperformance last?

The AI boom has dominated the stock market narrative in 2026, with companies linked to the data centre and artificial intelligence infrastructure theme delivering some of the biggest gains. HFCL, one of the major beneficiaries of that theme, had raced ahead with gains of up to 230% this year. But a company riding a very different wave has now overtaken it.

Welspun Corp, a global leader in manufacturing large-diameter welded line pipes used for oil, gas and water transmission, has surged 236% in 2026, overtaking HFCL’s mammoth 230% gain and emerging as the best-performing stock on the Nifty 500 index.

HFCL’s rally has been powered by expectations of a multi-year expansion in India’s data centre industry, supported by accelerating digitalisation, increasing cloud adoption and rising demand for artificial intelligence infrastructure. Data from Prime Infobase shows that FII exposure to HFCL more than doubled, with their stake rising to over 15% from 7% in Q4.

Decoding Welspun’s rise to the top

Welspun’s sharp rise this year has come amid renewed investment in global energy infrastructure, higher LNG demand, US pipeline infrastructure, Saudi energy and water projects, and opportunities in India’s pipeline sector.

$1.8 billion order: Welspun Corp has secured the largest single order in its history, valued at approximately $1.8 billion, or around Rs 17,200 crore, for the supply of pipes from its manufacturing facility in the United States.

The latest win has taken Welspun Corp’s global order book to a record $4.4 billion, equivalent to around Rs 42,100 crore, according to the company. This is the highest order book in the company’s history.

Welspun Corp said the order is expected to substantially strengthen its order book and provide multi-year revenue visibility. The company also described the win as a validation of the scale, quality and execution capability of its operations.

Big opportunity in the US: During its earnings call, the company said it sees strong multi-year demand visibility, driven by rising LNG demand, increasing power requirements linked to AI data centres and a resurgence in oil pipeline infrastructure.

Welspun said its USA spiral mill was already booked through FY28 at the end of FY26, underlining the demand visibility in the US market.

Middle East a new avenue: Earlier this week, the company secured a fresh order from Saudi Aramco for the manufacturing and supply of steel pipes.

Welspun Corp said its associate company East Pipes Integrated Company for Industry (EPIC), which is also listed in Saudi Arabia, has signed a contract with Saudi Aramco. The disclosure was also made to the Saudi stock exchanges. The order is valued at 771 million Saudi Riyal, or nearly Rs 2,000 crore.

Welspun Corp has also signed a memorandum of understanding (MoU) with Perma-Pipe International Holdings Inc., the developers of Jordan's National Water Carrier Project and the Government of the Hashemite Kingdom of Jordan, to explore setting up pipe manufacturing and advanced coating facilities in the country.

Under the proposed partnership, Welspun Corp and Perma-Pipe plan to establish a joint venture to develop and operate an integrated pipe manufacturing and coating platform in Jordan.

Can Welspun’s stellar surge last?

Earlier this month, Jefferies initiated coverage on Welspun Corp with a Buy rating and a price target of Rs 3,250, citing a multi-year upcycle in energy and water infrastructure spending in the US and Saudi Arabia.

Jefferies said Welspun, the world's largest welded line-pipe manufacturer, is well placed to benefit from rising energy and water infrastructure spending in the US and Saudi Arabia. The brokerage added that the company’s local manufacturing presence in both markets, capacity expansion and robust order book provide strong earnings visibility.

Jefferies expects US energy infrastructure investment to enter a multi-year expansion phase, driven by increasing liquefied natural gas exports, rising electricity demand from data centres and higher associated gas production from the Permian Basin.

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Bloomberg estimates cited in the report peg cumulative US midstream capital expenditure at around $240 billion during 2026-30, up 57% from the preceding five years. Jefferies also believes spending estimates could be revised upwards as several proposed pipeline projects have yet to receive final approval.

Welspun holds an estimated 30% share of the US large-diameter line-pipe market. Its domestic manufacturing presence gives it an advantage over import-dependent suppliers by limiting exposure to trade barriers, reducing delivery times and improving eligibility for projects that prioritise locally manufactured products.

India, meanwhile, presents a sizeable long-term opportunity across oil and gas, drinking water, irrigation and river-linking projects, with more than 25,000 kilometres of gas pipelines commissioned and over 10,000 kilometres under construction.

Jefferies expects Welspun's total pipe-manufacturing capacity to increase 51% to 37 lakh tonnes per annum by FY27, from 24 lakh tonnes in FY26. The expansion is projected to support a 17% compound annual growth rate in volumes between FY26 and FY29.

The brokerage expects EBITDA to grow at a CAGR of 32%, while earnings per share are projected to increase at a CAGR of 33% over the same period. Growth is expected to be supported by higher volumes and a greater contribution from the company's more profitable overseas operations.

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Nuvama echoes the view. Multiple discussions are ongoing regarding the expansion of Saudi pipelines and the water network, and these are likely to translate into orders in H2FY27, further smoothening the path for long-term top-line growth.

The brokerage also pointed to renewed opportunities following disruption to nearly 20% of LNG supply. WLCO expects higher demand for pipes as restoration activities come up over the next three to five years. Furthermore, the US, the largest exporter of LNG, continues to ramp up spending to fill the global supply gap, the brokerage said.

Welspun Corp’s sharp 2026 rally has brought the stock into focus after its strong run across the Nifty 500. With a large order book, ongoing capacity expansion and opportunities across key overseas markets, the company has several factors to track in the coming quarters. How these translate into actual revenue, margins and earnings will remain important for investors watching the stock.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.