Welspun Corp — Q1 FY26 earnings call

Call held 30 Jul 2025

Management summary

Welspun Corp delivered a record-breaking Q1 FY26, characterized by its highest-ever quarterly EBITDA and a robust order book of ₹19,000 crores. The company is successfully diversifying into Ductile Iron (DI) pipes and polymers (Sintex) while maintaining a dominant 30%+ market share in the US line pipe sector. Management remains highly bullish on the medium-term outlook, supported by river interlinking projects in India and energy export infrastructure in the US.

Highlights

  • Highest ever quarterly EBITDA of ₹560 crores with margins expanding to 16%

  • Consolidated order book stands at approximately ₹19,000 crores, providing 8 quarters of visibility in the US

  • Line pipe sales volumes for India and U.S. reached 182,000 tons; DI sales at 65,000 tons

  • Sintex recorded sales of ₹160 crores; targeting 5% market share of a ₹85,000 crore TAM by FY30

  • Maintained net cash position of ₹600 crores despite ongoing heavy capex

  • CRISIL upgraded long-term facilities to AA with a stable outlook

  • Annualized ROCE reported at approximately 24% for the quarter

Key financials

  1. EBITDA ₹560 Cr
  2. EBITDA Margin 16%
  3. PAT ₹350 Cr
  4. Net Cash ₹600 Cr
  5. Annualized ROCE 24%

What they filed

Q1 FY27: revenue down 14.3%, net profit down 54.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,033 2,449 2,281 1,828 1,822 −10%2,378 −3%2,270 −0%1,567 −14%
EBITDA191 268 244 236 188 −2%265 −1%334 +37%173 −27%
Net profit108 156 464 255 366 +239%161 +3%232 −50%116 −55%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Line Pipes (India & US)
    1,82,000 tons Sales Volume8 quarters Order Book Visibility (US)
  • Ductile Iron (DI) Pipes
    65,000 tons Sales Volume3,00,000 tons Order Book
  • Sintex (Building Materials)
    ₹160 Cr Revenue
  • SS Bar and Pipes
    9,000 tons Sales Volume

Guidance & targets

Market Share

  • Sintex Market Share Market Share · FY30 · High confidence 5%
    we are targeting a 5% market share by FY '30.

    — Ashish Prasad, CEO Sintex BAPL

Capex

  • Polymer Business Investment Capex · FY25-FY27 · High confidence ₹1,300 crores
    this INR1,300 crores is the investment which is going to happen over a period of time over the next 2 or 3 years' time

    — Vipul Mathur, MD and CEO

Capacity

  • Saudi Arabia Longitudinal Plant Commissioning Capacity · by end of FY26 · High confidence Operational
    I think so by the end of the financial year, we should be up and running there.

    — Vipul Mathur, MD and CEO

  • Bright Bar Project Commissioning Capacity · Q3 FY26 · High confidence Operational
    it will also be up and running in quarter 3 of FY '26.

    — Vipul Mathur, MD and CEO

Debt

  • Net Debt-to-EBITDA Ratio Debt · Ongoing · High confidence < 1.0x
    we have clearly said that we will never ever let our net debt-to-EBITDA exceed 1, right?

    — Vipul Mathur, MD and CEO

Risks & concerns

  • Slowdown in Jal Jeevan Mission (JJM) funding

    medium

    Management noted a slowdown in funding over the last 2-3 quarters but expects normalization in H2 FY26.

    Both acknowledged

  • Pricing pressure in the DI segment due to capacity addition

    medium

    Management dismissed 'unwarranted fears' about project viability, citing long-term demand from AMRUT and urbanization schemes.

    Analyst downplayed

  • Chinese competition in the OPVC pipe segment

    low

    Management argues that OPVC is a high-tech product and customers will eventually prefer quality/technology over the lower price of Chinese machinery.

    Analyst downplayed

Areas of evasion (2)

  • Specific EBITDA per ton breakdown for US vs India operations
  • Specific margin guidance for the new LSAW facility in the US

Q&A highlights

2 direct
Opportunity size in River Interlinking Direct
it could be more than 1 million tons of an opportunity which may come up to start with, right?

Reveals a massive domestic volume catalyst that could significantly boost the India pipe business over the next 2-3 years.

Asked by Abhishek Ghosh

Conflict of interest with Saudi JV vs New Independent Plant Direct
The joint venture... reduces spiral pipes. What we are setting up is longitudinal pipes and the ductile iron pipes... we will be covering the full basket.

Clarifies that the new independent facility does not compete with the JV but rather expands the product portfolio (Spiral vs Longitudinal/DI).

Asked by Vikash Singh

Sustainability of US EBITDA per ton Partial
I don't think so we will be in a position to share the specifics around that... but given the order book... I'm very sure that we will be able to maintain that.

Management declined to provide a specific EBITDA/ton breakdown for the US vs India but expressed high confidence in maintaining current margin levels.

Asked by Sailesh Raja

2 min read 5 chapters

Detailed narrative

Record Financial Performance and Credit Strength

Welspun Corp achieved its highest-ever quarterly EBITDA of ₹560 crores in Q1 FY26, with margins reaching 16%. This performance was driven by a favorable product mix and strong execution across India and the US. The company's financial health was further validated by a CRISIL upgrade to AA (Stable) and the maintenance of a ₹600 crore net cash position despite significant ongoing capital expenditure. Annualized ROCE for the quarter stood at a healthy 24%.

US Market Dominance and Energy Export Catalyst

The company maintains a dominant 30%+ market share in the US line pipe market, with an order book providing visibility for at least 8 quarters. Management highlighted the US government's push for energy exports, including a $750 billion trade deal with Europe, as a major catalyst for new infrastructure pipelines. To capitalize on this, Welspun is setting up a new LSAW plant in the US, which is expected to benefit from local production incentives and protection from import tariffs.

Sintex and the Strategic Pivot to Polymers

Sintex is emerging as a 'crown jewel' for the organization, with management expanding its Total Addressable Market (TAM) from ₹12,000 crores to ₹85,000 crores by entering the polymer pipe business. The company is investing ₹1,300 crores in this segment through FY27 and has already commissioned its Bhopal plant for OPVC pipes. Welspun is targeting a 5% market share in this expanded segment by FY30, positioning Sintex as a premium brand through enhanced plumber engagement and distribution networks.

Ductile Iron (DI) Pipes: Navigating Short-term Headwinds

While the DI pipe segment faced a temporary slowdown in Jal Jeevan Mission (JJM) funding over the last two quarters, management expects a full recovery in H2 FY26. The order book remains strong at over 300,000 tons. Welspun is also expanding its DI footprint into Saudi Arabia with a new plant on track for commissioning, supported by potential anti-dumping investigations in the Kingdom that would restrict cheap imports.

Massive Domestic Opportunity in River Interlinking

Management identified the interlinking of rivers in India as a 'mammoth' opportunity, potentially exceeding 1 million tons of pipe demand. Projects in Madhya Pradesh, Rajasthan (ERCP), and Maharashtra are expected to kickstart soon. Welspun's pan-India presence and track record in critical water infrastructure position it to capture a significant share of these upcoming government-funded projects.

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