 "Stock of this industrial products company has zoomed over 170% in 4 months")
The stock of the industrial products company surpassed its previous high of Rs 3,000, touched on May 15, 2023. In the past four months, the stock has skyrocketed 171 per cent from a level of Rs 1,178 on January 24. Thus far in the month of May, it has rallied 15 per cent. In the month of February, it had zoomed 66 per cent, followed by a 27-per cent rally in March and 11 per cent in April.
WPIL is engaged in manufacturing and sale of different types of pumps, spares & accessories and execution of water supply projects on a turnkey basis for industrial units, power utilities, irrigation departments, etc. WPIL has two operational manufacturing units in Kolkata, one unit in Ghaziabad, Uttar Pradesh, and two units in Maharashtra.
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For the January-March quarter (Q4FY23), WPIL reported a strong 30.8 per cent year-on-year (YoY) jump in its consolidated profit after tax at Rs 79.4 crore. Revenue from operations grew 35.8 per cent YoY at Rs 574 crore. Earnings before interest, taxes, depreciation and amortization (Ebitda) margin, however, was flat at 20.75 per cent.
The strong revenue growth was driven by international business and turnkey project business. The standalone business revenues nearly doubled to Rs 1,002 crore from Rs 530 crore. Stabilizing commodity prices supported strong margin performance across businesses, the company said.
"International business was driven by strong performances in infrastructure development in the MENA region. The continued focus on the Jal Jeevan Mission and AMRUT 2 augurs well for the medium term with new contract wins. The outlook on nuclear business in Europe is extremely encouraging for Rutschi business," the company said in its earnings presentation.
As on March 31, 2023, the company said its domestic order book position stood at Rs 3,955 crore and international order book stood at Rs 661 crore.
According to CARE Ratings, the domestic and global pumps industry is expected to grow at a steady rate driven by rising government expenditure toward water infrastructure.
The growing utilization of different types of pumps across different sectors such as chemical, oil & gas, nuclear, water & wastewater treatment plants, and general industries including power generation, food & beverages, mining, pulp & paper, etc., is expected to drive the market growth, the rating agency said.
In March 2023, CARE Ratings had revised the long-term rating and reaffirmation of the short-term rating assigned to the bank facilities/instruments of WPIL. The revision in ratings factors in the improvement in its consolidated total operating income (TOI) and operating profitability margins which is expected to sustain in the medium term considering the healthy revenue visibility from its current order book.
“The ‘stable’ outlook reflects that the company is likely to maintain its healthy operating performance given the current order book position which provides revenue visibility over the medium term. The financial risk profile is also expected to be maintained with no major debt led capex plans and healthy debt coverage indicators,” CARE Ratings had said in rationale.