Welspun Corporation's profit declines 15%

Mumbai: Steel pipes and plates maker Welspun Corporation recorded a decline in net profit for the quarter ending June, 2018 on the back of increasing expenses even as revenue registered a growth since last year.

Net profit declined 15% at Rs 43.70 crore while revenue from operations increased by 26% at Rs 1,949 crore on the back of higher volumes. Total expenses recorded an increase of 28% at Rs 2,003 crore.

The company's production of pipes were up by 26% with a 22% growth in sales since last year. It is currently sitting on an order book of Rs 11,100 crore at 1,602 KT doubling since last year's volume of 700 KT. Production of plates and coils too more than doubled to 123 KT.


“Our order book continues to remain at record levels, providing us strong visibility. We expect this order book to translate into higher capacity utilisation in the coming quarters," BK Goenka, chairman of the Welspun Group said in a release.

"WCL stands to benefit from its local presence in key markets, given the increasing emphasis of governments on local sourcing. We expect good order inflows to continue this year, especially from the Americas, on account of strong demand and high energy prices," Goenka said.

The company's net debt at the end of June stood at Rs 476 crore, down by 13% since last quarter and down by 45% since last year.

The company is setting up a spiral plant in Madhya Pradesh of around 175 kilo tonnes to move capacities closer to the market. With operations spread across India, US and Saudi Arabia, it expects to gain from the increasing emphasis on local sourcing requirements across geographies. While the company is witnessing an uptick in demand for pipelines from the Americas, demand from the oil and gas segment in the Middle East and North Africa (MENA) regions is expected to become more relevant in the second half of the current fiscal, the company said,with domestic market also gaining momentum across segments.