Stock of this iron & steel company zoomed 130% in 7 months; hits 15-yr high

Welspun Corp surged 7 per cent to Rs 489.30 on the BSE, its highest level since February 200

Shares of Welspun Corp hit a 15-year high of Rs 489.30, surging 7 per cent on the BSE in Thursday's intraday trade, on the back of heavy volumes after it reported profit after tax of Rs 385 crore in the September quarter (Q2FY24) on strong operational performance.

The company had posted loss of Rs 57 crore in the year-ago quarter.

Stock of iron & steel firm was trading at its highest level since February 2008. It had hit a record high of Rs 537.70 on January 17, 2008. In the past seven months, the market price of Welspun Corp has zoomed 130 per cent.

Consolidated revenue from operations for Q2FY24 more-than-doubled to Rs 4,059.5 crore from Rs 1,963.8 crore in Q2FY23. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) for Q2FY24 jumped more than 10 times to Rs 501 crore from Rs 45.8 crore in the corresponding quarter of previous fiscal.

Sales volume of Line Pipe businesses in India and the USA for H1FY24 rose 57 per cent year-on-year. The order book for Line Pipes in India and the US stands at 611 KMT, valued at around Rs 8,000 crore.

The company's associate company, EPIC in Saudi Arabia has a confirmed order book exceeding two years. The execution of the recent Aramco order of SAR 1.8 billion has started, Welspun Corp said in an exchange filing.

The company's net debt, meanwhile, reduced by Rs 520 crore to Rs 315 crore in the reported quarter, and in-line with guidance. The strong operational performance helped in sharp reduction in debt level, thereby strengthening the balance sheet further, the management said.

While performance of Pipe Solutions vertical has been steady, backed by strong execution capabilities, performance of Building Material segment has been improving gradually. With its iconic brand presence, Sintex has taken a step ahead to foray into PVC Pipes segment in Telengana.

Welspun Corp is one of the largest manufacturers of large diameter pipes globally. The company also manufactures BIS-certified Steel Billets, TMT (Thermo Mechanically Treated) Rebars, Ductile Iron (DI) Pipes, Stainless Steel Pipes, and Tubes & Bars.

The business outlook for the company remains promising. The Government of India has set a target to raise the share of natural gas in the energy mix from the current 6 per cent to 15 per cent by 2030. Gas demand will be driven by fertilisers, city gas distribution players, petrochemicals and refineries. This will result in continuously expanding the gas and CGD pipeline network on pan-India basis, and will be a key driver for the growth of the line pipe industry, Welspun Corp said.

In the US, after years of under-investment in oil and gas exploration and infrastructure, the focus is on boosting its oil and gas supply to cater to domestic energy needs as well as for exports to cater the energy needs in Europe.

The company’s HSAW plant in the US is fully booked till December 2023. The current business environment is favorable and active discussions are on to book new orders beyond 2023, the company said.