Stock Snapshot
Price Performance
Recommendation Rationale
Favorable growth outlook supported by strong order book and strategic capacity expansions.
Basis of our Recommendation
Welspun Corp Ltd (WCL) is positioned for robust growth driven by a strong order book of approximately Rs 25,350 crore, primarily linked to increasing demand in the US for LNG and water infrastructure. The company is set to benefit from significant capacity expansions in both the US and Saudi Arabia, with management projecting FY27 revenues of Rs 20,000 crore and EBITDA of Rs 2,850 crore. However, risks include execution challenges, domestic market overcapacity, and rising raw material costs.
Why We Like This Stock
- Strong order book of Rs 25,350 crore with significant US market exposure
- Strategic capacity expansions in the US and Saudi Arabia expected to drive revenue growth
- Management's confidence in achieving FY27 revenue and EBITDA targets
Things To Watch Out For
- Execution challenges related to new capacity commissioning
- Overcapacity and payment issues in the domestic ductile iron pipe segment
- Rising raw material costs and geopolitical disruptions as potential headwinds
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 17,340 | 13,978 | 16,770 | 19,309 | 22,161 |
| Profit Before Tax (Cr.) | 1,299 | 1,435 | 2,147 | 2,493 | 2,856 |
| PBT Margin | 7.5% | 10.3% | 12.8% | 12.9% | 12.9% |
| Net Profit (Cr.) | 1,182 | 1,271 | 1,840 | 2,118 | 2,425 |
| EPS | 43.8 | 48.4 | 69.5 | 80.3 | 91.9 |
Company Overview
Show Company Profile
Welspun Corp Limited, together with its subsidiaries, manufactures, trades in, distributes, and sells steel pipes, tubes, bars, coils, and plates in India, the United States, and internationally. It operates through Steel Products and Others segments. The company offers carbon steel line pipes comprising longitudinal submerged arc welding, helically submerged arc welding, high frequency welding, bends, and anti-corrosion and concrete weight coating; ductile iron pipes; thermo-mechanically treated bars and billets; pig iron products; stainless steel and alloy products; water storage tanks; industrial containers; SMC panel tanks; electrical enclosures; and uPVC doors and interiors. It also provides plastic products; basic precious and non-ferrous metals; prefabricated structures, infra project services, and turnkey projects; custom moulded products; polymers and its products; PVC/CPVC pipes and fittings for water supply; water pipes; and billet, rolled bar, black bar, ingot, bloom, and seamless pipes and tubes. The company's products are used in onshore and offshore oil, gas, and water transmission; gas distribution; households, commercial buildings, and institutional settings; hydrogen pipelines; and nuclear, space, defence, power and energy, and petrochemicals sectors. Welspun Corp Limited was formerly known as Welspun Gujarat Stahl Rohren Limited and changed its name to Welspun Corp Limited in April 2010. The company was incorporated in 1995 and is headquartered in Mumbai, India.