Welspun Corp — Q2 FY26 earnings call

Call held 31 Oct 2025

Management summary

Welspun Corp delivered a record-breaking Q2 FY26, characterized by its highest-ever quarterly EBITDA and a massive order book expansion. The company is successfully pivoting to capture a new demand paradigm in the US, where data centers are driving a surge in natural gas pipeline requirements. Management remains highly confident in its growth trajectory, maintaining its full-year guidance while expanding capacities in India, the US, and Saudi Arabia.

Highlights

  • Consolidated order book reached a record high of ₹23,500 crore, providing visibility for over 2 years.

  • Q2 EBITDA stood at ₹626 crore, the highest ever quarterly EBITDA for the company.

  • PAT for the quarter was ₹440 crore, representing a significant 53% YoY growth.

  • Annualized ROCE maintained at a healthy 24% with a net cash position despite ₹950 crore H1 capex.

  • Received massive new US orders totaling over $715 million (~₹6,000 crore) driven by data center demand.

  • Sintex business recorded ₹150 crore sales for the quarter, with H1 revenue at ~₹310 crore.

  • Finance costs significantly reduced by 41% YoY due to efficient cash flow management.

  • Maintained FY26 EBITDA guidance of ₹2,200 crore, having already achieved ₹1,186 crore in H1.

Key financials

  1. EBITDA ₹626 Cr
  2. PAT ₹440 Cr +53%YoY
  3. Order Book ₹23,500 Cr
  4. Annualized ROCE 24%
  5. Finance Cost Reduction 41% -41%YoY

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)
    2,50,000 tons Sales Volume
  • DI Pipes
    80,000 tons Sales Volume3,00,000 tons Order Book
  • Sintex (Building Materials)
    ₹150 Cr Quarterly Revenue₹310 Cr H1 Revenue
  • Stainless Steel (SS)
    7,000 tons SS Bar Sales1,700 tons SS Pipe Sales

Guidance & targets

Profitability

  • Annual EBITDA Guidance Profitability · FY26 · High confidence ₹2,200 crores

    From ₹2,200 crores today

    If you recollect, my friends, for FY ' 26, we had given an EBITDA guidance of Rs. 2,200 crores. And in H1, we have already touched Rs. 1,186 crores... we are very confident to deliver and achieve, if not exceed, the guidance.

    — Vipul Mathur, MD and CEO

Capacity

  • US Little Rock Mill Booking Capacity · FY28 · High confidence 100%
    With this booking in hand, our Little Rock mill is completely booked till FY ' 28.

    — Vipul Mathur, MD and CEO

  • Saudi DIP and LSAW Plant Commissioning Capacity · Q4 FY26 · High confidence Operational
    Ductile iron pipe facility, we are still maintaining that it should be up and running by March of 2026. And for the LSAW plant... both of them seem to be the fourth quarter of this financial year.

    — Vipul Mathur, MD and CEO

Capex

  • Total Multi-Year Capex Plan Capex · FY25-FY28 · High confidence ₹5,500 crores
    So, we had announced CAPEX of about INR 5,500 crores odd, and it was spread over three, four years, starting from FY '25.

    — Percy Birdy, CFO

Market Share

  • Sintex Pan-India Market Coverage Market Share · March 2026 · Medium confidence 80%
    We are trying to scale up our operations to reach to cover almost 80% market on a pan India basis by March 2026.

    — Vipul Mathur, MD and CEO

Margin

  • ROCE Maintenance Margin · FY26 · High confidence Above 23-24%
    You will see that we will try to maintain ROCE above 23%, 24%.

    — Vipul Mathur, MD and CEO

Risks & concerns

  • Fund Crunch in India Water Sector

    medium

    The water sector has been slightly depressed due to a fund crunch, impacting DI pipe demand in the short term.

    Management acknowledged

  • Execution Timelines

    medium

    Large order book requires precise execution across multiple geographies (US, India, Saudi) to meet guidance.

    Both acknowledged

  • Raw Material Price Volatility

    low

    Profitability is influenced by steel prices, though current orders are described as 'fairly profitable'.

    Management acknowledged

Areas of evasion (1)

  • Specific margin mix for the new US data center orders was not fully disclosed, cited as 'fairly profitable'.

Q&A highlights

2 direct
Data Center Demand Paradigm Shift Direct
This order... is not a direct order from a data center. This order is an order to a midstream company... they are also diverting this gas pipelines from Permian to wherever these data centers are coming.

Clarifies that the demand is coming from the infrastructure needed to power data centers (captive gas power plants) rather than the data centers themselves, opening a new multi-year demand stream.

Asked by Nishant Vass, 360 ONE Asset Management

Guidance Conservatism Partial
But are we going to change it drastically? The answer is no. Because there are certain orders which have already been factored for, and they need to be executed in time.

Management is being cautious about raising guidance despite strong H1 performance, citing execution timelines and order book factoring.

Asked by Vikash Singh, ICICI Securities

Saudi Anti-Dumping Investigation Direct
We see a strategic advantage having with this investigation because it will help us stabilizing our Saudi entity much expeditiously and faster.

Management views the Saudi anti-dumping investigation as a positive for their local manufacturing facility in Saudi Arabia, as it will restrict imports and favor local production.

Asked by Sailesh Raja, B&K Securities

3 min read 6 chapters

Detailed narrative

US Data Center Boom: A New Growth Engine

Welspun is witnessing a paradigm shift in the US market where the proliferation of data centers is driving massive demand for natural gas pipelines. These 'energy guzzlers' require dedicated captive power plants, which in turn need gas transported from the Permian Basin. The company recently secured orders exceeding $715 million (~₹6,000 crore) for this segment, contributing to the Little Rock mill being fully booked until FY28. Management estimates over 250 data centers are currently under discussion in the US, providing a 3-5 year visibility for this new value chain.

Record Order Book and Execution Visibility

The consolidated order book has reached an all-time high of ₹23,500 crore, a record for the last decade. This includes a balanced split of approximately 600,000 tons each between India and the US. This backlog provides clear execution visibility for the next two years in the American market and over a year for other territories. Management reaffirmed its FY26 EBITDA guidance of ₹2,200 crore, having already achieved 54% of this target in the first half of the year.

Strategic Expansion in Saudi Arabia

Welspun is aggressively expanding its footprint in Saudi Arabia to align with 'Saudi Vision 2030'. The company is setting up a 100% wholly-owned subsidiary with a longitudinal mill and a DI pipe plant, both expected to be operational by Q4 FY26. This local presence is strategically timed to benefit from Aramco's $10 billion annual investment spree and the government's focus on water security. Management expects these facilities to stabilize quickly, aided by local anti-dumping investigations against imports.

India Water Sector: Navigating Short-term Headwinds

While the Indian water sector faced a temporary slowdown due to a fund crunch, Welspun expects a rebound starting early next year. Major river interlinking projects in Madhya Pradesh, Maharashtra, and Rajasthan are expected to generate demand for 4-5 million tons of pipes over the next few years. The company's DI pipe business maintains a strong 300,000-ton order book, and management is confident that the 'Jal Jeevan Mission' funding will soon normalize, driving domestic volume growth.

Sintex and Building Materials: Scaling the B2C Reach

The Sintex business is undergoing a strategic shift toward secondary-driven sales and brand building. In Q2, Sintex recorded sales of ₹150 crore, supported by a massive distribution network of 500 distributors and nearly 28,000 retailers. The company aims to cover 80% of the pan-India market by March 2026. Additionally, the Bhopal OPVC plant is now fully operational and has begun receiving orders, marking Welspun's deeper penetration into the plastic pipe segment.

Financial Prudence Amidst Heavy Capex

Welspun continues to maintain a net cash position despite a significant capex outlay of ₹950 crore in H1 FY26. The total capex plan of ₹5,500 crore is on track, with ₹2,000 crore already deployed. The company has also successfully reduced its finance costs by 41% YoY, reflecting strong free cash flow generation from existing businesses. Management remains committed to maintaining an ROCE above 23-24%, emphasizing financial discipline alongside aggressive capacity expansion.

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