India: Welspun Corp posts nearly 30% sales growth in Q3FY'23

Welspun Corp Ltd has recently announced its consolidated financial results for the third quarter ended 31 December, 2022. The highlights are:

Sales increase 29% q-o-q: Sales volume of line pipes aggregated to 281,000 t in Q3FY2023, increasing by 29% q-o-q in comparison with 218,000 t in Q2FY2023. Moreover, sales of SS pipes grew by 27% q-o-q to 1,278 t in Q3 from 1009 t in the previous quarter.

The profitability was due to the removal of 15% export duty on pig iron which has given a boost to selling prices and demand. Moreover, the financial performance of the business is expected to significantly improve in subsequent quarters.

Company's global order book position: Welspun's current global order book position stands at 9,28,000 t valued at INR 13,200 crores. Active bid books are at 17,00,000 t in Q3FY2023.

East Pipes Integrated Company for Industry (EPIC), the associate company of Welspun recently announced signing contracts for the supply of steel pipes for water transmission with a total value of around SAR 569 ($151) million with NEOM and Petrojet company. The huge thrust on oil and gas and water infrastructure will result in a strong demand for pipelines and the company is expected to win more orders in due course of time.

Dispatches commence in TMT plant: The company's newly commissioned state-of-the-art TMT plant, has started dispatches of TMT bars. Demand from the markets of Gujarat is around 3 mnt per annum driven by spending on housing and construction. Of this, about 2 mnt is manufactured within the state while 1 mnt is procured from other states.

Acquisition of the specified assets of ABG Shipyards: The Company has received the possession of moveable properties from the liquidator of ABG. In addition, the Company's wholly owned subsidiary, Nauyaan Shipyard Private Limited has received possession of immovable property at Dahej, Gujarat from the liquidator. It is estimated that the metal scrap not required for business purposes will be disposed of within 12-15 months. During the period, company will evaluate new business areas like defence, green steel, offshore wind and oil and gas structures to ensure optimal utilisation of the assets.

Acquisition of Sintex BAPL non-convertible debentures: The company has acquired the non-convertible debentures of Sintex BAPL Ltd with an outstanding amount of INR 1,223 crore at a consideration of INR 421 crore from its wholly-owned subsidiary Mahatva Plastic Products and Building Materials Private Limited. The process is nearing completion and it will be over on or before Q1 FY24.

Environmental, social and governance (ESG) initiatives: Welspun has published its first sustainability report on its environmental, social and governance performance. This also highlights the company's progress against its sustainability goals and its alignment with global frameworks.

Furthermore, the company also published its first-ever tax transparency report to uphold the highest standards of tax transparency.

Company's prospect: "Global pipe scenario, post-Ukraine war has changed and accordingly we are seeing lot of traction in exports from India, as well as in the Saudi and the US markets. With the recent Union Budget, outlook for infrastructure remains bright and the domestic market traction remains high. As a global pipe player and further with our business diversification, we are confident about our future growth prospects," said B. K. Goenka, Chairman of the company.