India ▾

Welspun Specialty Solutions Limited — Q2 FY26 earnings call

Call held 28 Oct 2025

Company page: Welspun Specialty Solutions share price, financials & guidance record

Management summary

Welspun Specialty Solutions Limited reported a strong Q2 FY26, with revenue growing 40% YoY to INR 243 crores and PAT turning profitable at INR 9.6 crores. This performance was driven by robust volume growth in both pipe (30% YoY) and bar (80% YoY) segments. The company's order book remains healthy at INR 254 crores, and it is progressing with its bright bar project and IBR accreditation, while also improving its renewable energy consumption.

Highlights

  • Revenue for Q2 FY26 stood at INR 243 crores, up 40% YoY and 15% QoQ.

  • EBITDA for Q2 FY26 was INR 18.1 crores, more than doubled YoY and up 29% QoQ.

  • Profit after tax for Q2 FY26 was INR 9.6 crores, compared to a loss of INR 6.4 crores in the same period last year.

  • Stainless steel seamless pipe sales recorded a 30% YoY growth in Q2 FY26, reaching an all-time high.

  • Stainless steel bars segment registered an 80% YoY growth in Q2 FY26.

  • Order book at the end of Q2 FY26 remained strong at approximately 6,000 metric tons, valued at INR 254 crores.

  • CARE Ratings upgraded long-term facility rating from CARE A- to CARE A+ and short-term from CARE A1 to CARE A1+.

  • Renewable electricity consumption increased from 31% in FY25 to approximately 50% in H1 FY26.

Concerns

  • Decline in export mix due to global tariff actions and protectionism

Key financials

2 periods

Headline

  • Revenue
    ₹243 Cr
    YoY +40% QoQ +15%
  • EBITDA
    ₹18.1 Cr
    YoY +100% QoQ +29%
  • PAT
    ₹9.6 Cr
  • Finance Cost
    ₹4.3 Cr
    YoY -59% QoQ -59%

H1 FY26

  • Total Income
    ₹454 Cr
    YoY +33%
  • EBITDA
    ₹32 Cr
    YoY +28%
  • PAT
    ₹9.6 Cr

What they filed

Q1 FY27: revenue down 3.8%, net profit up 788.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue167 194 200 201 239 +43%226 +16%220 +10%194 −4%
EBITDA3 7 10 4 14 +424%17 +127%11 +15%11 +145%
Net profit-6 -4 4 -1 10 +252%10 +364%4 +20%5 +788%
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.

Order book

high confidence

Total value

₹254 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹200 Cr

Execution

Boiler tubes order delivery until April or May of next year.

Composition

Mix 2 products
  • Steel (value) 33%
  • Pipes and Tubes (value) 67%

Share of order book by product

Order inflow has remained flat at an average of INR 200 crores per quarter, but the company expects improvement in the near term by expanding its customer base despite a shrunk market scenario.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex ₹75 Cr
    • Bright bar project, upgradations, debottlenecking ₹75 Cr
    You see, we are investing close to INR75 crores overall, not just for, let's say, the new bright bar shop, but various other upgradations, debottlenecking and a lot of other processes, which required these debottlenecking and upgradations.
  • Debt Debt disclosed
    Finance cost at INR4.3 crores declined sharply by about 59% year-on-year and similar 59% quarter-on-quarter also, underscoring our ongoing efforts towards financial discipline and balance sheet efficiency.

Guidance & targets

Volume

  • Overall volume improvement Volume · current FY · High confidence 25-30%
    I think last couple of calls, we have already we had maintained that we will be at least doing a 25%, 30% improvement over the last year.

    — Anuj Burakia

Capacity Utilization

  • Overall capacity utilization Capacity Utilization · within 3 years · High confidence 80-85%
    I see that coming in less than 3 years for sure.

    — Anuj Burakia

Project Completion

  • Bright bar project commissioning Project Completion · Q3 FY26 · High confidence Commissioning
    I am pleased to share that our bright bar project new bright bar project is progressing on schedule and in full swing with commissioning targeted for quarter 3 financial year '26.

    — Anuj Burakia

Accreditation Completion

  • IBR accreditation for chrome alloy steel bars and tubes Accreditation Completion · Q3 FY26 · High confidence Completion
    The IBR accreditation process for our chrome alloy steel bars and tubes have also advanced well, and we expect completion during quarter 3 financial year '26.

    — Anuj Burakia

What to watch in Q3 FY26

Bright bar project commissioning

Q3 FY26
Current Progressing on schedule
Target Commissioned

Why it matters

Successful commissioning will enhance capability and capacity in a value-added segment, impacting product mix and margins.

I am pleased to share that our bright bar project new bright bar project is progressing on schedule and in full swing with commissioning targeted for quarter 3 financial year '26.

Risks & concerns

  • Decline in export mix due to global tariff actions and protectionism

    high

    Steel export mix down from 35-40% (FY25) to 15-20% (this year); pipe export mix down from 15-20% to <10%.

    Both acknowledged

  • Global macroeconomic uncertainty and heightened protectionism

    medium

    Global economy adjusting to evolving policy measures and protectionism, influencing market dynamics and business sentiment.

    Management acknowledged

  • Subdued demand and heightened volatility in global markets

    medium

    Further impacted by recent U.S. tariff actions, adding uncertainty to global supply chains.

    Management acknowledged

  • Price pressure on steel products, especially bars

    medium

    Gross profit per metric ton declined from INR 100/kg to INR 83/kg, but management believes market is at the bottom.

    Both acknowledged

Q&A highlights

5 direct
Order book composition and execution timeline for boiler tubes. Direct
So you can say that tonnage-wise, I think out of 6,000 tonnes, it is roughly 50-50 volume-wise order book for tubes and bars... particular boiler tubes order is going to get delivered until April or May of next year.

Clarifies the split of the current order book and provides a timeline for a significant order, impacting future revenue recognition.

Asked by Radha

Flat order inflow and prospects for improvement. Partial
See -- you see, order inflow, I would say, is a factor of 2 aspects. One is the overall market scenario, how much business is there in the market to -- for a grab? And the second is our own customer base or our own spread out there in the market... I'm sure, in near future, things will start to improve.

Addresses a concern about stagnant order inflow, attributing it to market conditions while highlighting internal efforts to expand customer base and expressing optimism for future improvement.

Asked by Radha

Decline in gross profit per metric ton and outlook for margins. Partial
I can only say that there is more pressure on of course, there is a pressure -- price pressure on all the steel products. But comparing tubes and bars, it is more on the bar side of it... I think more effect is coming because of the bar prices, which have become really very competitive... this looks to be the bottom to me.

Explains the reason for margin pressure (bar prices) and provides a bottoming-out signal, suggesting potential for margin recovery if steel prices improve.

Asked by Radha

Impact of Chinese imports reduction and acceptance of peer products on pricing. Direct
No, I think there is a big reduction in the Chinese imports in India... antidumping was brought in and then, with the quality control order and those kind of interventions, the import from China reduced big time. And that is what created a space for a few other players to start investing through piercing mills.

Clarifies the market dynamics post-Chinese import restrictions and how it has created opportunities for domestic players, influencing pricing and competition.

Asked by Radha

Capacity of SS bars and pipes and the purpose of new capex. Direct
I think our total saleable capacity is 120,000 tonnes if we, let's say, run at full potential with everything bright bar... Pipes, if we do everything cold finished would be about 15,000 tonnes... Our new bright bar project... will not add to our overall steelmaking capacity. It will add to our capacity of doing bright bars.

Provides clarity on existing capacities and confirms that the new capex is for value-addition (bright bar conversion) rather than increasing overall steelmaking capacity, aligning with strategic focus on higher-value products.

Asked by Raman KV

Export mix decline and reasons. Direct
I can tell you that at this point in time, our mix of steel export, which used to be about 35%, 40% during financial year '25, has come down to about 15%, 20% during this year... Similarly, on pipe, where we used to be about 15%, 20% during last year, has actually come down during H1 to about 10% or a bit lower than 10%.

Highlights a significant shift in the export landscape due to global tariff actions and protectionism, indicating a strategic pivot towards domestic markets.

Asked by Radha

Triggers for incremental demand in the industry. Direct
See, major stainless steel consumption, it happens in energy sector, which includes not just thermal, but also oil and gas, whether refinery or in the transportation of oil and gas, fertilizer, then nuclear power. So I think every strategic sector in India is currently buoyant in more degree or less degree, but they are buoyant.

Identifies key end-user sectors driving demand for stainless steel products, providing insight into the company's market opportunities.

Asked by Radha

3 min read 6 chapters

Detailed narrative

Strong Financial Performance in Q2 FY26

Welspun Specialty Solutions reported a robust Q2 FY26, with revenue reaching INR 243 crores, marking a 40% year-on-year and 15% quarter-on-quarter growth. EBITDA more than doubled year-on-year to INR 18.1 crores, growing 29% sequentially. The company also achieved a profit after tax of INR 9.6 crores, a significant turnaround from a loss of INR 6.4 crores in the same period last year and INR 8 crores in Q1 FY26. Finance costs declined sharply by 59% both YoY and QoQ, reflecting improved financial discipline.

Robust Volume Growth and Healthy Order Book

The company witnessed strong volume growth, with stainless steel seamless pipe sales achieving an all-time high, growing 30% year-on-year in Q2 FY26. The stainless steel bars segment also saw substantial growth of 80% year-on-year. The order book at the end of Q2 FY26 remained strong at approximately 6,000 metric tons, valued at INR 254 crores, with a roughly 50-50 volume split between tubes and bars. The average order inflow has been flat at INR 200 crores per quarter, but management expects improvement in the near term.

Strategic Projects and Operational Efficiency Initiatives

Welspun Specialty is actively pursuing strategic initiatives, including the bright bar project, which is on schedule for commissioning in Q3 FY26. This project, part of an overall INR 75 crore capex for upgradations, aims to enhance value-added product capabilities by converting black bars to bright bars. The IBR accreditation process for chrome alloy steel bars and tubes is also expected to complete in Q3 FY26. Furthermore, the company significantly increased its renewable electricity consumption from 31% in FY25 to approximately 50% in H1 FY26, demonstrating its commitment to sustainability and operational efficiency.

Market Dynamics and Margin Pressure Outlook

Management noted ongoing price pressure in the steel market, particularly on the bar side, leading to a decline in gross profit per metric ton to INR 83/kg from INR 100/kg. However, they believe the market is at a bottom and expect improvement with better demand. The reduction in Chinese imports due to anti-dumping duties has created opportunities for domestic players, though global protectionist measures continue to impact export sales. The overall economic activity is a key factor affecting market conditions.

Shift in Export Mix and Domestic Market Focus

The company experienced a significant decline in its export mix, with steel exports falling from 35-40% in FY25 to 15-20% this year, and pipe exports dropping from 15-20% to less than 10% in H1. This shift is attributed to global tariff actions and protectionism, leading to increased focus on the buoyant domestic market. Key domestic demand drivers include the energy sector (thermal, oil & gas, refinery, fertilizer, nuclear power) and B2B segments like forging and component manufacturing, where the company is expanding its customer base.

Capacity and Future Growth Outlook

Welspun Specialty's total saleable capacity for bars is 120,000 tonnes per year, and for cold-finished pipes, it is about 15,000 tonnes. The new bright bar project will not add to overall steelmaking capacity but will enhance value-added bright bar production. The company aims for 80-85% capacity utilization within three years and expects a 25-30% volume improvement over the last year. Management expressed confidence in meeting and exceeding business plans for both stainless steel bar and seamless pipe segments.

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

More Capital Goods earnings calls