Linde India rallies as Covid wave spurs oxygen demand
The stock of Linde India, an Indian subsidiary of Linde PLC, has doubled in the last three months. Delivery on the stock on the NSE increased to 63% in April compared with an average of 57% in the last three months.
The industrial gas business accounts for nearly three-fourths of Linde’s revenue.
ET Intelligence Group: Increasing coronavirus cases have resulted in a scarcity of medical oxygen in the healthcare industry, putting the spotlight on Linde India, a supplier of medical oxygen to hospitals and industrial gases to corporations.
The stock of Linde India, an Indian subsidiary of Linde PLC, has doubled in the last three months. Delivery on the stock on the NSE increased to 63% in April compared with an average of 57% in the last three months.
The healthcare segment of Linde India contributes nearly 14% to its total revenues, according to analysts' estimates. The Kolkata-based company is planning to increase revenue contribution from the healthcare segment and reduce its excessive reliance on the steel industry. Steel is one of the biggest consumers of oxygen.
The healthcare segment contributes nearly 20% of the total revenue of its parent company, according to Linde PLC’s presentation. This leaves a lot of room for Indian subsidiaries to expand.
According to Haitong, an MNC brokerage, Linde India delivers more than 200 tonnes of medical oxygen every day to hospitals. Along with it has introduced Entonox, an anaesthetic gas used for natural childbirth and for short-term pain relief in a variety of medical procedures.
Besides, the company also provides medical engineering services to set up pipelines within hospitals with access to each bed, this could result in a sizeable revenue opportunity as the government and private sectors step on the gas on medical infrastructure.
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Furthermore, emergency authorisation of foreign vaccines may help the industrial gas business of Linde India as several foreign vaccines need to be transported in cryogenic containers that use liquid nitrogen or dry ice to maintain sub-zero temperature. Linde India is the maker of these two important ingredients for sub-zero temperature, but it also produces containers to transport goods at a lower temperature. The industrial gas business accounts for nearly three-fourths of Linde’s revenue.
