Moneycontrol
Last Updated : Nov 02, 2018 02:12 PM IST | Source: Housing.com

Welspun Corp's international operations puts it in good stead

Most of its record order book is for its facilities in the US and Saudi Arabia

Prince Mathews Thomas @prince0879
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Welspun Corp's  more than decade-old international foray continues to play an important role in the company's performance, as its second quarterly financial results show.

The world's second largest producer of large diameter pipes reported a 38.32 percent increase in its consolidated net profit, which rose to Rs 55.84 crore in the second quarter of the present financial year, from Rs 40.37 crore a year ago.

The consolidated revenues increased to Rs 2,440 crore from Rs 2,043 crore a year earlier.

However, Welspun Corp reported a net loss in the standalone basis, at Rs 10.55 crore. The silver lining being that the losses have narrowed from Rs 18.5 crore in the same three-month period last year.

Apart from its facility in India, the company also has manufacturing plants in the US and Saudi Arabia.

Order book

The company has an order book of 1.7 million tons, valued at about $2.05 billion, a historic high.

The record is thanks to the company's operations in Saudi Arabia and the US.

"Half of the order book comes from our facility in Saudi Arabia. The order is good enough to keep our facility there engaged for eight more quarters," MD and CEO Vipul Mathur, told Moneycontrol. 

About 500,000 tons of the order has gone to the company's US facility. "It is good enough for up to five quarters" said Mathur.

While India has the company's largest facility, its share in the order book is of 325,000 tons.

"The US market is still looking very good, as high crude prices and demand, have fueled demand for our products. Demand for gas is also high. The environment will continue for two more years, resulting in more orders," said Mathur.

The outlook is similarly optimistic for the Saudi Arabia market, where the increase in crude prices has prompted state-owned Saudi Aramco to announce multi-billion dollar projects.

"Oil and gas is making a comeback there. Because of the new projects, we will see huge requirement," said Mathur.

Interestingly, the present orders for the facility there is for water projects. Water is transported in the same kind of pipes that are otherwise used to move oil, because of the huge distance between water resource/treatment plant and residential places.

In India, however, Mathur said that 'things could be better.' He added that there is a lag in demand in the domestic market.

"Overall, India is looking optimistic. We see huge opportunities in the water market, especially in Madhya Pradesh and the southern states," said Mathur.

He expects the remaining two quarters of the year to bring in better numbers for the company. "The first two quarters have set the tone," said Mathur.
First Published on Nov 2, 2018 02:12 pm
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