India-based Welspun Corp’s pipe production skyrocketed by 106pc to 268,000mt in the second quarter of FY21 (Q2) from the prior year quarter on a consolidated basis. The company’s sales volume was up by 12pc to 249,000mt in the quarter.
Company claims that its performance has been showing improvement due to orders received in the domestic markets as well as a few large orders for exports.
Entering DI pipe segment
Company is planning to set up a greenfield facility at Anjar (Gujarat) to enter the high growth Ductile Iron (DI) pipe segment looking at significant growth and huge demand for DI pipes over the next 10 years. These pipes are used in water supply infrastructure, sewage pipe system, irrigation water system and industrial water transportation.
Its upcoming manufacturing units includes steel making facility of 400,000mt and DI plant of 250,000mt and expected to be commissioned within 18 months.
Welspun Corp has a manufacturing capacity of more than 2.5 mn mt in Dahej, Anjar, Mandya and Bhopal in India. Its overseas units are at Little Rock in the USA and Dammam in Saudi Arabia.
India business
The company has seen increased tendering activity from domestic oil and natural gas PSU companies which has resulted in several orders for them.
Water projects will gain momentum as the governments renew their focus on providing piped water connections and improve irrigation facilities in drought-prone areas. For instance, Uttar Pradesh has set a target of providing piped drinking water in each household of the state, including water-stressed regions like Bundelkhand, within two years.
Export market:
In Q2, company received a 45,000mt order from Australia while overall exports accounted for 421,000mt. In the US, there is an element of uncertainty in the run up to the Presidential elections and the possible impact of the outcome on the Energy policy.
Saudi Arabia
The Joint Venture in Saudi Arabia has an order backlog of around four months. It is also expecting a few large orders under the long-term agreement with Saudi Aramco to supply HSAW pipes for O&G applications.
Welspun Corp results in Q2 2020-21:
| Particulars: | Q2 FY21 | Q1 FY21 | Q-o-Q |
| Pipe production (mt) | 2,68,000 | 1,30,000 | 106% |
| Pipe sales (mt) | 2,49,000 | 2,22,000 | 12% |
| Operating EBIDTA (Rs. Crore) | 187 | 183 | 2% |
| Net Profit (Rs. Crore) | 152 | 58 | 162% |