Welspun Corp

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.

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.

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.

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.

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.

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.