Indian pipes maker Welspun's Q1 profit jumps as strong exports boost margins

Welspun

07/08/2024 13:34

BENGALURU, Aug 7 (Reuters) - India's Welspun Corp  WGSR.NS , which makes pipes to move oil, natural gas and
water, reported a jump in first-quarter profit on Wednesday as strong exports boost its margins and as expenses fell.
    The company's consolidated profit rose 50% to 2.48 billion rupees (around $30 million) in the three months ended
June 30.
    Margins improved on the back of a better mix of exports, mainly to the U.S. and Middle East, the company said. Its
expenses dropped nearly 25%, the results showed.
    
    KEY CONTEXT
    Welspun's fortunes have gotten a boost from not only the growing demand for fuel in India but also from key export
markets of the U.S. and Middle East. Moreover, it has also benefitted from steel prices plunging to a
more-than-three-year low in India.
    That drop, along with lowered infrastructure spending during the national general elections in the quarter, hit the
earnings of steelmakers, like JSW Steel  JSTL.NS  and Jindal Steel  JNSP.NS .
    
    PEER COMPARISON 
    
                                   Valuation (next 12     Estimates (next 12         Analysts' sentiment        
                                         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    15.22           14.76     6.55      -7.24    Strong         4      1.00           0.79
                                                                               Buy                              
 Jindal SAW            JIND.NS    10.27            6.73     4.04       8.35    Strong         2      0.81           0.64
                                                                               Buy                              
 APL Apollo Tubes      APLA.NS    34.49           21.90    22.44      39.19    Buy           13      0.81           0.35
 Ratnamani Metals      RMT.NS     32.89           22.44    16.87      19.83    Buy            3      0.99           0.40
 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
    
    APRIL-JUNE STOCK PERFORMANCE    
    
    -- All data from LSEG IBES
    -- $1 = 83.9309 Indian rupees
    

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Welspun Corp Q1 vs peers    https://tmsnrt.rs/4ftPpsd
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 (Reporting by Manvi Pant in Bengaluru; Editing by Savio D'Souza)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))