India's Welspun Corp posts skyrocketing Q3 profit on strong demand

Welspun

06/02/2024 10:05

BENGALURU, Feb 6 (Reuters) - Indian steel pipes maker
Welspun Corp  WGSR.NS  reported an over twelve-fold jump in
third-quarter profit on Tuesday, as strong demand for its pipes
across sectors more than offset a surge in costs.
    Steel consumption in India, the world's second-biggest crude
steel producer, jumped during the period, reflecting buoyant
demand in one of the world's fastest growing economies as
pre-election spending by the government remained strong.
    Welspun reported a strong surge in demand for its pipes -
used for gas pipelines, irrigation and infrastructure - and
forecast higher demand in the near-term on the back of sustained
government spending.
    The company reported a consolidated net profit of 2.92
billion rupees ($35.2 million) for the quarter ended Dec. 31,
compared to 232.4 million rupees last year.
    Prices of steel products ticked up in October and November
as Indians celebrated a delayed festive season, following
lacklusture prices as cheap imports from countries like China
surged.
    The company - which makes line steel pipes in the United
States and Saudi Arabia - reported a near-98% jump in revenue
from operations at 47.50 billion rupees.
    However, its expenses also surged to 44.39 billion rupees
from 26.87 billion rupees.
    Welspun's results contrast rival APL Apollo Tubes  APLA.NS ,
which reported a 2% drop in profit as the company de-stocked its
products in anticipation of lower price corrections.
    Shares of Welspun rose 4.7% after the results, but closed
just 0.2% higher. For the reporting period, the shares rose 39%.

($1 = 83.0240 Indian rupees)

 (Reporting by Manvi Pant in Bengaluru; Editing by Varun H K)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))