Welspun Enterprises Limited

Welspun Enterprises reported a robust financial performance for FY25, with consolidated revenues growing by 25% year-on-year to ₹3,584 crores, surpassing the guidance of 15-20% growth. Consolidated EBITDA also exceeded expectations, increasing by 18% to ₹730 crores against a guidance of ₹700 crores. For Q4 FY25, consolidated revenue from operations was ₹1,021 crores (up 24% YoY) and EBITDA stood at ₹207 crores (up 32% YoY), driven by an improved margin profile of 19.3%.

The company has strategically diversified into the water sector over the last 7 years, which now accounts for nearly 85% of its current order book. This pivot has transformed Welspun Enterprises into a differentiated company focusing on highly promising and technically advanced segments. Welspun Michigan Engineers Limited (WMEL), where Welspun Enterprises increased its stake to 60%, serves as an innovation and technology hub, recording ₹668 crores in revenue for FY25 (62% YoY growth) with a 21% EBITDA margin and 29% ROCE. WMEL's order book stands at ₹2,925 crores, nearly 3x its FY25 revenue.

The consolidated order book stands at a healthy ₹14,300 crores as of March 31, 2025, with the Water segment contributing approximately ₹10,700 crores, including ₹4,400 crores from O&M and ₹1,950 crores from tunneling. The transportation vertical accounts for ₹1,600 crores. The company aims to achieve a consolidated unexecuted order book of over ₹20,000 crores by the end of FY26 and targets booking orders upwards of ₹10,000 crores in FY26, with a bid pipeline exceeding ₹30,000 crores.

Several key projects are progressing well. The Aunta-Simaria Road Project is almost complete, with PCOD expected by the end of May 2025. The Mukarba Chowk-Panipat (MCP) project is expected to receive its completion certificate this quarter, followed by the transfer of the balance 51% stake to Actis. The Varanasi-Aurangabad (VARP) project is on track for completion by this calendar year, and the Sattanathapuram-Nagapattinam (SNRP) project has achieved over 60% physical progress, with PCOD expected this calendar year. The Dharavi Wastewater Treatment facility is on track for commissioning by November 2026, and the Bhandup Water Treatment Facility has secured all critical approvals, with site work gaining momentum post-monsoons.

For FY26, Welspun Enterprises guides for a consolidated revenue growth of 15-20% year-on-year and consolidated EBITDA growth of over 20%, with ROCE improving to above 15% (excluding monetization gains). Over 90% of the FY26 revenue is already secured in the current order book, though execution is expected to be H2 heavy. The company maintains a strong liquidity position with ₹1,061 crores in standalone cash reserves and ₹1,155 crores in consolidated cash, with net debt at ₹145 crores (HAM SPV level). An enabling resolution for a ₹1,000 crores fundraise has been approved, but it is not immediately needed given current liquidity.

The Smart Ops initiative, primarily driven by WMEL, saw the successful completion of the Durga Kund Renovation Project in Varanasi in Q4 FY25, and the Chandrabhaga River Project is expected to be completed next month. Retrofitting work for a 15 MLD STP in Mathura will commence in June 2025. While Smart Ops margins are expected to stabilize in 3-4 years as it's in a developmental phase, it is a key part of integrating advanced solutions to enhance project efficiency and environmental impact. WMEL's tunneling, rehabilitation, and marine capabilities are crucial for the company's specialized infrastructure focus.