Welspun posts 73 pc rise in Q1 net
Steel pipemaker Welspun Corp Ltd, formerly Welspun Gujarat Stahl Rohren, said on Wednesday it posted a 73 per cent increase in net profit in the quarter-ended June, led by higher volumes and cost control.
By Agencies |
MUMBAI: Steel pipemaker Welspun CorpLtd, formerly Welspun Gujarat Stahl Rohren, said on Wednesday it posted a 73 percent increase in net profit in the quarter-ended June, led by higher volumes andcost control.
The firm posted a consolidated net profit of 1.9billion rupees in April-June, compared with 1.1 billion rupees a year ago, on a25 per cent jump in net sales to 24.2 billion rupees.
The firm, whichhas an order book of 50 billion rupees, expects new orders worth 10-20 billionrupees in the coming weeks, B.K. Goenka, chairman and managing director, toldreporters at a press conference after announcing the results.
Theseorders would come from both international and domestic markets, Goenkaadded.
To fulfill this growing demand, the firm is expanding itscapacity by 450,000 tonnes with an investment of around 4 billion rupees inFY11.
Besides, the firm is in the process of acquiring majority stakein infrastructure firm MSK Projects and has entered the middleeast market with acquisition of Aziz Pipes.
Analysts are optimisticabout the business model of Welspun, with its recent acquisitions helping itenter newer markets. The company has also bid for projects in Europe andAustralia.
Fourteen of sixteen brokerages have a "buy" rating onWelspun, according to Thomson Reuters I/B/E/S, as analysts are bullish over thecompany's order book and expansion plans.
The company expects tomaintain a profit margin of 16-17 per cent in FY11, Goenka said, adding theglobal pipeline market was "very, very competitive andchallenging."
"The market is very challenging because steel pricesare going up and down and with the quarterly pricing mechanism it is difficultto get into long-term contracts," he said.
Global mining firms haveswitched to quarterly contracts for supplying coking coal and iron ore - key rawmaterials in steel manufacturing - making it difficult for buyers of the alloyto get into long-term contracts.
Shares in the firm ended up 2.97 percent at 254.9 rupees in a weak Mumbai market.
The firm posted a consolidated net profit of 1.9billion rupees in April-June, compared with 1.1 billion rupees a year ago, on a25 per cent jump in net sales to 24.2 billion rupees.
The firm, whichhas an order book of 50 billion rupees, expects new orders worth 10-20 billionrupees in the coming weeks, B.K. Goenka, chairman and managing director, toldreporters at a press conference after announcing the results.
Theseorders would come from both international and domestic markets, Goenkaadded.
To fulfill this growing demand, the firm is expanding itscapacity by 450,000 tonnes with an investment of around 4 billion rupees inFY11.
Besides, the firm is in the process of acquiring majority stakein infrastructure firm MSK Projects
Analysts are optimisticabout the business model of Welspun, with its recent acquisitions helping itenter newer markets. The company has also bid for projects in Europe andAustralia.
Fourteen of sixteen brokerages have a "buy" rating onWelspun, according to Thomson Reuters I/B/E/S, as analysts are bullish over thecompany's order book and expansion plans.
The company expects tomaintain a profit margin of 16-17 per cent in FY11, Goenka said, adding theglobal pipeline market was "very, very competitive andchallenging."
"The market is very challenging because steel pricesare going up and down and with the quarterly pricing mechanism it is difficultto get into long-term contracts," he said.
Global mining firms haveswitched to quarterly contracts for supplying coking coal and iron ore - key rawmaterials in steel manufacturing - making it difficult for buyers of the alloyto get into long-term contracts.
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Shares in the firm ended up 2.97 percent at 254.9 rupees in a weak Mumbai market.
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