Welspun Corp’s $350 million US bet rides rising oil, gas pipeline demand

Mumbai: Welspun Corp, a flagship line pipe manufacturer in the $10-billion Welspun Group, is focusing on the US where it has invested $300-350 million in two plants to capitalise on the rising demand for oil and gas pipelines in the region amid soaring energy expenses.

The company, which already has a significant presence in India and Saudi Arabia, expects its US manufacturing operations to benefit from increased drilling activity, higher global oil and gas consumption and investments in pipeline infrastructure, managing director and chief executive officer Vipul Mathur told ET.

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The US is stepping up both refining and drilling capacity amid a surge in energy costs, with crude oil prices climbing nearly 70% in a year after the Iran war began in February. "We saw that the global supply chain was getting disrupted, and we felt it would be a good idea to invest in the US and be ready when the opportunity arises," Mathur said. Welspun's order book in the US provides visibility for nearly three years, Mathur said, strengthening confidence in a business which usually operates with a visibility of 4-6 quarters.

As one of the largest in the world, Welspun Corp has a global pipe manufacturing capacity of around 3.5-4 million for line pipes and ductile iron pipes. Of this, 2 million tonnes of capacity is in India, and around 1 million tonnes in the US and Saudi Arabia each. Of its two plants in the US, one has been commissioned, while the other will be commissioned by the end of this year.

The company estimates a 30-35% market share in the US oil and gas pipe market, with increased drilling, higher energy consumption, and supply disruptions involving several traditional oil and gas suppliers expected to boost demand.

The US administration's emphasis on domestic oil and gas production, alongside efforts to facilitate infrastructure development and provide faster right-of-way approvals, has further supported the outlook, he said.

In another key market, Saudi Arabia, Welspun has invested around $100-150 million on an oil and gas pipe manufacturing facility. Welspun has a presence in the region through East Pipes, which was formerly known as Welspun Middle East.

Mathur expects Saudi Arabia's infra spending under Vision 2030 to generate substantial demand for pipes, particularly as the country looks to diversify its oil evacuation routes and strengthen energy infrastructure. The company is exploring opportunities arising from reconstruction activity in West Asia and has announced plans to establish an entity in Jordan, with a proposed manufacturing facility to cater to regional demand.

In bid to expand into other revenue sources, Welspun Corp intends to focus on specialised, value-added pipes rather than standard pipes. "We don't want to be a commodity player. We are interested in niche, value-added segment," Mathur said.

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Over the last year, shares of Welspun Corp have risen from a low of ₹710 to an all-time high of ₹2,900, an over four-fold jump in the stock price. Its consolidated profit for the June quarter surged three-fold year-on-year to ₹1,048 crore. The company has guided for a revenue of ₹20,000 crore and Ebitda (earnings before interest, tax, depreciation and amortization) of ₹2,850 crore in the current fiscal. This compares to a revenue of ₹16,770 crore and Ebitda of ₹2,371 crore in FY26.