Welspun Corp

Welspun Corp delivered a robust FY26, with revenue reaching almost INR 17,000 crores, aligning with guidance. EBITDA surpassed the INR 2,200 crores guidance, coming in at INR 2,370 crores. PAT demonstrated significant growth, increasing by 42% year-on-year to INR 1,613 crores. The company maintained strong profitability with EBITDA margins exceeding 14% and a healthy ROCE of 22.3%, while remaining a net cash entity despite ongoing capital expenditures.

The company's order book stands at a substantial INR 25,000 crores, equivalent to $2.5 billion, providing strong revenue visibility. Management indicated that plants are almost booked till FY2028. The order book is primarily composed of large diameter pipes for the oil and gas sector, with approximately two-thirds from the US and one-third from India, reflecting a focus on premium customers and high-quality projects.

The US market is experiencing significant tailwinds driven by three main factors: exponential growth in LNG exports, the development of multiple AI data centers requiring gas-based power plants, and a resurgence in oil production for exports. These factors are creating massive demand for pipelines, with Welspun holding a dominant market share of over 33-35% in the US, and this demand is expected to persist for the next 5-7 years.

The Middle East, particularly Saudi Arabia, presents substantial growth opportunities beyond oil and gas, with heavy investments in water infrastructure. This includes massive desalination projects requiring large diameter pipelines for transport and extensive distribution networks. Welspun has a local footprint and is investing in a greenfield Ductile Iron Pipe (DIP) project to capitalize on the water distribution segment, complementing its strong presence in oil and gas.

Welspun is on track to commission new capacities in both the US and Saudi Arabia. The HFIW plant in the US is expected to come online by the end of Q1 FY27, and the LSAW plant in the US by the end of calendar year 2026. Projects in Saudi Arabia, including a large diameter pipe plant and a ductile iron plant, are slated for commissioning in FY27. These new capacities are projected to contribute to top-line and bottom-line growth, with the full benefit expected in FY2028. For FY27, the company has guided for a top line of INR 20,000 crores and EBITDA of INR 2,850 crores, representing an approximate 20% year-on-year jump in EBITDA.

The company completed an internal restructuring where Welspun Mauritius sold its 22% stake in EPIC (Welspun Pipes USA) for INR 2,500 crores. This move is part of a broader strategy to consolidate entities in high-growth geographies like the US, aiming to achieve greater flexibility and create value as opportunities arise. Management emphasized this as a normal restructuring to optimize the organizational structure.