India's Welspun Corp posts lower quarterly profit on tepid demand

Welspun

05/02/2025 11:55

Feb 5 (Reuters) - India's Welspun Corp  WGSR.NS  reported a lower third-quarter profit on Wednesday due
to lacklustre demand for its pipes amid a slowdown in construction activity and delays in government projects.
    Its consolidated profit before share of profit from joint venture, associates and taxes dipped 4.4% to 3.05
billion rupees (about $35 million) for the October-December quarter. 
    Welspun reported a one-time gain of 3.78 billion rupees due to a share sale by its unit Welspun Mauritius
Holdings, which led to its net profit more than doubling to 6.75 billion rupees. 
    The company, which makes products including pipes to move oil and natural gas, said its revenue from
operations slid 24% to 36.14 billion rupees.
    For further earnings highlights, (click here). 
    
    KEY CONTEXT 
    Domestic steel demand remained muted in the three-month period due to lower construction activity and delays
in projects, analysts said. 
    The year-ago quarter witnessed a burst of demand as government spending was higher ahead of the national
general elections, which has cooled off since then.
    The blow to the Welspun's bottomline was cushioned by a drop in the cost of coaking coal, a key steelmaking
raw material. As a result, its total raw material costs dropped 33%.
    
    PEER COMPARISON 
    
                                 Valuation (next    Estimates (next 12    Analysts' sentiment              
                                 12 months)         months)                                                
                      RIC        PE     EV/EBITDA   Revenue     Profit    Mean     No. of   Stock to       Div
                                                    growth(%)   growth(%  rating*  analyst  price          yield
                                                                )                  s        target**       (%)
 Welspun Corp          WGSR.NS   16.27  9.27        16.31       18.87     Buy      3        0.90           0.67
 APL Apollo Tubes      APLA.NS   38.06  24.14       20.72       55.73     Buy      14       0.86           0.36
 Jindal SAW            JIND.NS   7.45   5.24        3.96        8.53      Strong   3        0.58           0.80
                                                                          Buy                              
 Ratnamani Metals      RMT.NS    25.41  17.61       19.33       26.83     Buy      4        0.73           0.49
 and Tubes                                                                                                 
 * The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT
    
   OCTOBER-DECEMBER STOCK PERFORMANCE 
    
    -- All data from LSEG 
    -- $1 = 87.3710 Indian rupees

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 (Reporting by Manvi Pant in Bengaluru; Editing by Sonia Cheema)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))