Welspun Corp : Pipes theme

  •   Welspun Corp  25% GUIDANCE: FY26 Revenue Growth


  • FY25 EBITDA stood at Rs, 1,858 Crore beating our guidance of Rs 1,700 Crore. 
  • ROCE stood at 21%. 
  • Both EBITDA and ROCE surpassed the guidance for 2 consecutive years
  • Consistent improvement in performance during last four quarters
  • Robust order book worth more than Rs 19,500 Crore including line pipes (India & US), ductile iron (DI) pipes and stainless steel bars & Pipes. US mill book is booked for next 8 quarters
  • Strong focus on core geographies and core products continues: Improved visibility in all core geographies of India, USA and KSA. 
  • Strategic investments projects announced for these three key markets are on track and progressing well. 
  • Announced more projects keeping focus on high priority business segments and to maintain leadership position
  • Gross Debt reduction of ~INR 1,000 Crore in FY25, in spite of Capex spend of ~INR 900 Crore. 
  • Became a net cash Company with Rs 1049 Core
  • The Board has recommended dividend of Rs 5/- per equity share (100%) of the face value of Rs 5/- each
  • Associate company, East Pipes Integrated Company for Industry in KSA delivered record topline growth and profitability enhancement in FY25
  • Strong business outlook for next 2 years. 
  • FY26 Guidance: Revenue-Rs 17,500 Crore, EBITDA- Rs 2,200 Crore, ROCE- >20%. 
  • Net Debt/ EBITDA to remain below 1x
  • Market outlook in USA remains robust supported by current administration’s focus Oil&Gas
  • Domestic line pipes business performance has been strong supported by good export business. 
  • Other business segments including DI pipes, SS bars & pipes, Sintex and TMT Rebars also performed satisfactorily
  • Sintex: OPVC pipes launch and other plastic pipes & WST projects are on track   
  • Welspun Corp Ltd (WCL) is the flagship company of Welspun World, one of India's fastest-growing multinationals with a leadership position in line pipes and home solutions segments. Other lines of businesses within Welspun World include pipe solutions, building materials, infrastructure, warehousing, retail, advanced textiles, and flooring solutions.
  • Exceptional items: Q4FY25 - INR 476 Crore of proceeds from the partial stake sale and fair valuation of Nauyaan Shipyard, and in Q3FY25 - INR 378 Crore proceeds from the sale of EPIC shares, and in Q2FY25 – INR 11 Crore provision arising from sale of Sintex US LLC. FY24- PAT includes INR 105 Crore on sale of EPIC shares   
  •   Water • Huge opportunity in interlinking of rivers - Push from centre and states like MP (Ken-Betwa & PKC), Rajasthan (ERCP) and Maharashtra (Wainganga-Nalganga) will kick start pipe demand from this year followed by more interlinking projects under consideration in northern part of India • States like Gujarat, MP, Rajasthan, Haryana, Tamil Nadu and Jharkhand are exponentially increasing the water pipeline network for irrigation, industrialization and urbanization
  • Exports • Continue to observe good demand for LSAW pipes for critical applications such as deep offshore, Sour Service where Welspun has an impeccable track record • Market Potential building up in Hydrogen Pipelines & Carbon Capture Pipelines globally • Witnessing an increasing trend in offshore and onshore pipelines calling for very demanding metallurgical and dimensional requirements. This fits well in Welspun’s capabilities   

 

https://youtu.be/VxcD5w8aH_E?si=oH10IU5-42ntOpG7

  • Welspun Corp : Pipes theme 
  • Seeing a huge growth potential, both domestically and internationally in core segments like Oil & Gas, Water, Infrastructure, Defence, Power, and Plastics
  • India Oil & Gas : Demand has recovered with further expansion of gas pipeline grid across the country. Additional 10,000 km of pipelines are likely to be installed in the next 2- 3 years 
  • States like Gujarat, MP, Rajasthan, Tamil Nadu and Karnataka are exponentially increasing the water pipeline network for irrigation, industrialization and urbanization purposes. The “Jal Jeevan Mission” has also ensured the last mile delivery of potable water and this continues to support strong demand
  • The “Jal Jeevan Mission”, “Nal Se Jal” and “Amrut” schemes of the GOI aims to provide safe and sufficient drinking water to all the households in both rural and urban India.
  • The “Swachh Bharat Mission Grameen” aims to provide solid and waste management across all the villages  Under the above signature schemes, thousands of kilometre of pipelines will be laid to achieve the above mentioned objectives 
  • The Department of Drinking Water and Sanitation (DoDWS) has been allocated a budget of INR 77,390 Crores. Out of this amount, INR 69,926 Crores has been allocated to the Jal Jeevan Mission in the interim budget 
  • Saudi Aramco is expanding its oil production capacity from 12 mbpd to 13 mbpd by 2027 and have budgetary allocation of spending almost US$10 billion per year. Consequently we are seeing multiple projects for Oil & Gas being announced and awarded in the recent past. We expect this growth trend to continue for next 5- 7 years
  • US is likely to defend its position of being the largest LNG exporter in the world. We continue to see very active drilling activity in the Permian Basin, leading to strong demand for new gas pipelines for bringing the Permian gas to the Gulf Coast  
  • The market size of Plastic Pipes used for buildings and infrastructure in India is likely to reach to ~Rs 130,000 crore in 2030. Thus, it provides a huge opportunity to Sintex to leverage its brand value, optimise its distribution channel and rationalise its logistics cost, thereby charting out a strong growth outlook and further strengthening our positon into the B2C segment

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