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Welspun Enterprises Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

Welspun Enterprises reported a mixed Q3 FY26, with 9-month EBITDA growing 10% and margins expanding to 23.1%, driven by operational efficiency. However, Q3 revenue declined 12% YoY due to project delays and monsoon impact, leading to a revised FY26 revenue guidance. The company's order book remains strong at INR15,000 crores, with significant additions expected. An exceptional loss of INR49 crores was recognized from an oil and gas JV write-off.

Highlights

Consolidated 9-month EBITDA grew 10% YoY to INR573 crores, with margins expanding to 23.1% from 19.3%.
Consolidated order book stands at INR15,000 crores, with visibility to cross INR20,000 crores post Pune-Shirur LOA.
CRISIL revised outlook from stable to positive, reaffirming AA- rating, reflecting strong balance sheet and robust business model.
Received first annuity for Aunta-Simaria Road project, enabling asset monetization expected in Q1/Q2 FY27.
Strong consolidated cash reserves of INR1,400 crores, providing ample liquidity.

Concerns

Consolidated Q3 FY26 income declined 12% YoY to INR806 crores, primarily due to statutory clearance delays for Dharavi-Ghatkopar Tunnel and extended monsoon.
One-time exceptional loss of INR49 crores recognized due to write-off of Kutch Block GKOSN-2009/1 in oil and gas JV.
FY26 revenue guidance revised downwards to INR3,600-3,700 crores from INR4,000 crores due to project delays and monsoon impact.
Water segment declined 15% YoY in 9-month period, mainly due to slow progress in UP JJM.

Key financials

2 periods

Q3 FY26

Consolidated Income
₹806 Cr
YoY -12%
Consolidated EBITDA
₹174 Cr
Consolidated EBITDA Margin
21.6%
YoY +2%
Consolidated PAT (ex-exceptional)
₹80 Cr
YoY +4%

9M FY26

Consolidated Income
₹2,480 Cr
YoY -9%
Consolidated EBITDA
₹573 Cr
YoY +10%
Consolidated EBITDA Margin
23.1%
YoY +3.9%
Consolidated PAT (ex-exceptional)
₹279 Cr
YoY +12%

What they filed

Q1 FY27: revenue down 8.4%, net profit down 44.6% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	815	896	1,054	845	784 −4%	787 −12%	1,199 +14%	774 −8%
Expenses	688	739	871	664	612	633	961	623
EBITDA	127	157	183	181	172 +35%	154 −2%	239 +31%	151 −17%
Margin	16%	18%	17%	21%	22%	20%	20%	19%
Other income	11	17	17	13	22	-32	32	1
Interest	34	50	44	42	53	52	53	53
Depreciation	14	14	15	11	13	13	13	11
Profit before tax	90	111	142	141	128 +42%	58 −48%	205 +44%	88 −38%
Tax rate	32%	30%	26%	28%	23%	47%	21%	36%
Net profit	62	77	105	101	98 +58%	31 −60%	163 +55%	56 −45%
EPS	4.23	5.16	6.83	6.56	6.53	1.74	10.45	3.36

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

Share of Revenue

₹2,416 Cr Total

Transport (9M FY26) ₹1,065 Cr 44.1%
Water (9M FY26) ₹764 Cr 31.6%
Tunnelling and Rehabilitation (9M FY26) ₹587 Cr 24.3%

Order book

high confidence

Total value

₹15,000 Cr

as of 2025-12-31 quantified

Composition

Mix 2 segments

Water ₹11,000 Cr 81.2%
Welspun Michigan (WMEL) ₹2,540 Cr 18.8%

Share of order book by segment, derived from disclosed amounts

Pipeline

L1 awaiting loa

Pune-Shirur BOT project, L1 status, expected to be added shortly.

The current order book provides strong visibility and is expected to grow significantly with upcoming project awards, ensuring sustained long-term growth.

Source: Prepared remarks

Capital allocation

high confidence

Debt Net ₹466 Cr
- New borrowing Issued INR1.9 crores warrants at INR525 per share, aggregating INR1,000 crores. Received INR250 crores upfront. ₹1,000 Cr
On a consolidated basis, net worth is INR3,148 crores with a net debt of INR466 crores.
Liquidity Cash ₹1,400 Cr Consolidated cash reserves provide ample liquidity to fund growth while maintaining financial discipline.

On the balance sheet front, we remain well capitalized with consolidated cash reserves of INR1,400 crores, providing ample liquidity to fund growth while maintaining financial discipline.

Guidance & targets

Revenue

Consolidated Revenue Revenue · FY26 · High confidence INR3,600-3,700 crores

Previously INR4,000 crores → INR3,600-3,700 crores

Accordingly, we now expect consolidated revenues for FY '26 to be in the range of INR3,600 crores to INR3,700 crores.

— Mr. Sandeep Garg

Profitability

EBITDA Targets Profitability · FY26 · High confidence on track

However, we remain on track to achieve our full year EBITDA targets.

— Mr. Sandeep Garg
Long-term EBITDA Margin Profitability · long-term · High confidence 18-19%

As I have always maintained, we would want to definitely stay with the macro level guideline of about 18% or 19% EBITDA on a long-term basis.

— Mr. Sandeep Garg

Revenue Composition

FY26 Revenue from Secured Order Book Revenue Composition · FY26 · High confidence 90%

At the start of the financial year, we had guided that approximately 90% of the FY '26 revenues would be driven by the existing secured order book and around 10% from new orders.

— Mr. Sandeep Garg
FY26 Revenue from New Orders Revenue Composition · FY26 · High confidence 10%

— Mr. Sandeep Garg

Growth

Consolidated Revenue Growth Growth · FY27 · Medium confidence upward or close to 20%

Previously about 15% → upward or close to 20%

Now that FY '26 is not expected to meet its target and there is a spillover of the revenue, the lower base as well as accumulation of these orders, I think that the FY '27 may grow upward or close to about 20%.

— Mr. Sandeep Garg

Execution

Pune-Shirur Project Execution Execution · next financial year (FY27) · Medium confidence INR500-600 crores

But given that we are anticipating this award this year, I would definitely believe that anything between INR500 crores to INR600 crores, we should be able to execute in the next financial year, depending upon if this is awarded in this financial year in an appropriate time.

— Mr. Sandeep Garg

What to watch in Q4 FY26

Pune-Shirur BOT Project LOA

within this quarter (Q4 FY26)

Current L1 status, awaiting LOA

Target LOA received

Why it matters

Crucial for adding INR7,300 crores to order book and achieving FY26/FY27 revenue targets.

The project continues to remain under L1 status. The letter of award was delayed due to elections, and we now expect to receive the LOA shortly, likely within this quarter.

Risks & concerns

Statutory clearances and local disturbances for DGT project
medium

Delay in DGT project execution due to pending CRZ approvals and local disturbances during elections, impacting Q3 revenue recognition.

Management acknowledged
Extended monsoon impact
medium

Extended monsoon impacted execution across both WEL and WMEL, contributing to Q3 revenue decline.

Management acknowledged
Delay in project awards (Pune-Shirur BOT)
medium

LOA for Pune-Shirur BOT project delayed due to elections, impacting Q3 project commencement and revenue.

Management acknowledged
UP JJM slow progress and profit recognition
medium

Slow progress in UP JJM led to 15% decline in Water segment revenue; profits not recognized until traction and cash flows from client are clear.

Management acknowledged
Oil & Gas JV write-off
low

Exceptional loss of INR49 crores from write-off of Kutch Block GKOSN-2009/1, which was not part of core business plan.

Management acknowledged

Q&A highlights

7 direct

Standalone EBITDA margin softness in Q3 and future outlook Direct

So the way to look at this, I would say, is to look at the nine-month average. There is a decline in the Q3 slightly softness because of the revenue recognition has been lesser than what is anticipated. And it is also dependent upon the phase of the project that we are executing. So I think at an overall level, I would recommend we look at a larger period rather than purely at quarter-to-quarter.

Analyst questioned Q3 standalone margin dip; management attributed it to timing and project phase, advising to look at 9-month average.

Asked by Vaibhav Shah

Bid pipeline and diversification strategy beyond water and highways Direct

So, in terms of our water vertical, we are focused on treatment and transmission projects. We are not going in for distribution projects, which is not what we want to do. In terms of the pipeline, just to give you an idea, we do see approximately about within these three spaces in water, something like about INR3 lakh crores worth of order in the medium term. ... I think we will continue with these three segments that we are currently involved in, that is the Water, the Tunnelling and in the Transport vertical. So these are the three segments that we will be continuing with. We don't see in the immediate future, anything added at this point in time.

Management clarified focus on treatment and transmission in water, with a INR3 lakh crore pipeline, and no immediate plans for diversification beyond current three segments (Water, Tunnelling, Transport).

Asked by Vaibhav Shah

Reasons for maximum execution delay in FY26 and confidence in Q4 revenue target Direct

I suggest we put short questions, so it will be easier for us to answer. So the first question that you have is what contributed to the maximum impact? The quantification may be a bit difficult for us, but we can definitely say that the ex monsoon has impacted us in a big way, both across Welspun Enterprises as well as across Welspun Michigan, so which is what I would first call out. In terms of our other thing is obviously that Pune-Shirur getting delayed, wherein we had planned for certain activities during the initial phases is impacting us. ... So first question, we would have been, when we were revising downwards, we were very careful about what is achievable. So the question is, are we reasonably confident about the INR1,200 crores? We do believe that we are very confident about it.

Management cited extended monsoon, Pune-Shirur delay, and local disturbances as key reasons for execution delays, but expressed confidence in achieving the revised Q4 revenue target of INR1,200 crores.

Asked by Sanjay Shah

WMEL's role as a strategic moat in integrated Water and Tunnelling contracts Direct

Yes, we do see Welspun Michigan becoming a strategic part of tunnelling growth. That is for sure. Water also, as he is heading you integrated water, the synergies should pan out as we move forward.

Management confirmed WMEL's strategic importance for tunnelling growth and integrated water projects, expecting synergies.

Asked by Sanjay Shah

Statutory clearances and local disturbances for Dharavi-Ghatkopar Tunnel (DGT) project Direct

So, I'll take this question for, on behalf of Saurin. So, we had started our work at, on the DGT at Dharavi end, which is, as you know, it's from our own site location, which is for the Dharavi Sewage Treatment Plant. We anticipated no issues. However, because we have to dig to about 150 meters deep, the locals had certain observations, which due to the elections, the authorities decided not to intervene at that stage, but I think the intervention is now taking place. So that front is now. ... Now we do have the clearance on the starting of the work in Ghatkopar on DGT in from the CRZ, there is a formal approval or a process-related approval pending. However, we are reasonably confident that we can start the work on DGT in this quarter on both the ends.

Analyst questioned DGT delays; management explained local disturbances during elections and pending CRZ approvals, but expressed confidence in starting work on both ends this quarter.

Asked by Sailesh Raja

Opportunity in water treatment and competitive landscape Direct

So the treatment business will be spread over the large volume as well as the distributed treatment facilities. In the large play, we are associating ourselves with the big players like Xylem and Veolia to address that large-scale market. On the distributed network, as we have talked about, we have a technology, which we have taken rights for the complete India as Smart Ops, which should help us address this distributed treatment space. ... In past also, I have addressed that we are looking at not only the contracting or EPC projects, but we are also looking from a technology point of view, and that's something which we believe we are currently very aggressively looking at the Smart Ops and then an associated technologies so that it gives us an edge on the treatment space that we believe will get unlocked in India in a large way.

Management outlined strategy for water treatment, partnering with large players for volume and leveraging Smart Ops technology for distributed networks, focusing on technology-led EPC projects.

Asked by Riddhesh Gandhi

Valuation of Aunta-Simaria project post annuity receipt Partial

We have received INR72 crores as annuity. With respect to valuation, we are in process, and we'll come back to you on right valuation. ... To answer your question, do we anticipate our equity returns to be 1.5x the equity invested? The answer is we expect better results. However, if the process is on, once the process gets completed, we will definitely share the specific details.

Analyst inquired about the valuation of the Aunta-Simaria project after receiving annuity; management confirmed INR72 crores annuity and expects better than 1.5x equity returns, promising more details post completion of the valuation process.

Asked by Radha Agarwalla

Further write-offs in oil and gas segment after Kutch Block write-off Direct

Interesting one. Let me assure you rather the only three blocks that we have been talking about in the past have been the Mumbai block, the B-9 block and now C37. For at least the last nine months, I have not talked about this GK block. This was never being considered in our business plan, what we were speaking to you, and we continue to speak. This block was not being run by us. We were not the leaders. ... And I can assure you, there are no further write-offs that we anticipate in any of these three blocks, which are the business blocks for us.

Analyst questioned potential for further oil and gas write-offs; management clarified the Kutch Block was not part of their business plan and assured no further write-offs are anticipated for their core three blocks.

Asked by Radha Agarwalla

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview and Revenue Revision

Welspun Enterprises reported a consolidated income of INR806 crores for Q3 FY26, a 12% year-on-year decline, primarily attributed to delays in statutory clearances for the Dharavi-Ghatkopar Tunnel project and an extended monsoon. For the nine-month period, consolidated income stood at INR2,480 crores, down 9% YoY. Consequently, the company revised its FY26 consolidated revenue guidance downwards to INR3,600-3,700 crores from the earlier INR4,000 crores, while maintaining its full-year EBITDA targets.

EBITDA Margin Expansion and Operational Efficiency

Despite the revenue decline, Welspun Enterprises demonstrated strong operational efficiency. Consolidated EBITDA for the nine-month period grew 10% year-on-year to INR573 crores, with margins expanding significantly to 23.1% from 19.3%. Q3 FY26 consolidated EBITDA stood at INR174 crores, with a margin of 21.6%, reflecting a 2% expansion. Management emphasized that the long-term EBITDA margin guidance remains at 18-19%.

Order Book Strength and Pipeline

The consolidated order book currently stands at INR15,000 crores. This includes INR5,400 crores from O&M contracts, providing stable long-term cash flows. The water segment alone accounts for approximately INR11,000 crores of the order book, with Welspun Michigan Engineers Limited contributing INR2,540 crores. The company is L1 for the Pune-Shirur Road BOT project, valued at INR7,300 crores, which is expected to be added to the order book shortly, pushing the total to over INR20,000 crores.

Project Updates and Delays

The Aunta-Simaria Road project received its first annuity payment, paving the way for asset monetization expected in Q1 or Q2 FY27, which will move INR800 crores of debt off the balance sheet. The Dharavi-Ghatkopar Tunnel project faced delays due to statutory clearances and local disturbances, but management is confident of commencing work on both ends in Q4 FY26. The Panjarapur project is now expected to commence in Q4 FY26, and the SNRP project is nearly 80% complete, targeting PCOD-1 by Q4 FY26.

Oil & Gas Write-off and Future Outlook

The company recognized an exceptional loss of INR49 crores in Q3 FY26, representing its 35% share of a write-off for the Kutch Block GKOSN-2009/1 in an oil and gas joint venture. Management clarified that this block was never part of their core business plan and assured no further write-offs are anticipated for their three active offshore blocks (Mumbai, B-9, and C37). Discussions are ongoing with ONGC to optimize infrastructure and finalize field development plans within the next two months.

Digital Transformation and Sustainability Initiatives

Welspun Enterprises is actively pursuing digital transformation, leveraging Building Information Modelling (BIM) for quantity estimation and project tracking. They have implemented SAP S/4HANA RISE and are digitizing supply chain management. The company also released its second sustainability report, 'Sustainability Connection, the Unstoppable Journey,' and received the Sustainable Organization Award 2025, underscoring its commitment to ESG priorities and LITE values (learning, innovation, trust & transparency, endurance).

This is an AI-generated summary of a publicly available earnings call transcript.

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