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Aug 31, 2023

India's Welspun Corp Q1 profit rises on higher demand for line pipes

Welspun corporate office building is pictured in Mumbai, India, August 26, 2016. REUTERS/Shailesh Andrade/File photo Acquire Licensing Rights BENGALURU, Aug 4 (Reuters) - Indian pipe manufacturer

Welspun corporate office building is pictured in Mumbai, India, August 26, 2016. REUTERS/Shailesh Andrade/File photo Acquire Licensing Rights

BENGALURU, Aug 4 (Reuters) - Indian pipe manufacturer Welspun Corporation (WGSR.NS) reported a jump in first-quarter profit on Friday, aided by a strong demand for its line and stainless steel pipes.

The company's consolidated net profit rose to 1.65 billion rupees ($19.93 million) from 41.1 million rupees a year earlier.

The company said it maintained a healthy order book for line pipes amid a favourable environment for oil and gas capex.

Sales of line pipes surged more than 89% year-on-year, while the pending order book was valued at 86.75 billion rupees, the company said in an exchange filing. Additionally, sales volumes for stainless steel pipes and bars nearly doubled.

The company, which also operates in the United States and Saudi Arabia, said its revenue from operations more than tripled to 40.69 billion rupees. The total expenses came in at 38.79 billion rupees, as input costs nearly doubled.

Welspun expects a top line of 150 billion rupees, a growth of about 50%, in the fiscal year 2024, and sees earnings before interest, taxes, depreciation, and amortization (EBITDA) jump about 90% to 15 billion rupees.

On the international business front, the company expects strong demand for its helical submerged arc welded (HSAW) pipes to continue in the U.S. market. It also sees significant demand in Saudi Arabia from investments being made in water desalination projects, according to the filing.

Separately, Welspun said its net debt was reduced by 3.03 billion rupees to 8.35 billion rupees in the current quarter.

Welspun shares rose as much as 4.4% to a near 15-year high after the results but closed down 2.8%.

($1 = 82.8100 Indian rupees)

Reporting by Dimpal Gulwani in Bengaluru; editing by Eileen Soreng

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