Welspun Corp tumbles after weak quarterly numbers

Welspun Corp (WCL) declared its quarterly results on Monday. The company’s top line dropped by 22.49 per cent to Rs 1841 crore in Q4FY16 on yearly basis. Its EBITDA too declined sharply by 59.57 per cent to Rs 157 crore in Q4FY16 as compared to same period in previous financial year. WCL’s net profit decreased by 83.97 per cent to Rs 23 crore in Q4FY16 on yearly basis.

On yearly front, WCL’s revenue declined by 1.54 per cent to Rs 8320 crore in FY16 as compared to previous fiscal year. Its production of pipes was flat at 1119 KMT while sales was down 5 per cent YoY to 1100 KMT in FY16. The company’s EBITDA increased by 6.55 per cent to Rs 897 crore in Q4FY16 on yearly basis. Its EBITDA margin expanded by 82 basis points to 10.79 per cent in FY16 as compared to previous financial year. WCL’s net profit  boosted by more than 3 times to Rs 227 crore in FY16 on yearly basis. The company’s net profit margin expanded by 191 basis points to 2.73 per cent in FY16 as compared to previous fiscal year.

WCL’s current pipe order book position stands at 913K MTs (Rs 5100 crore). The company’s large orders booked during Q4FY16 include 200K MTs for a project in MENA.

The share price of WCL declined by 13.24 per cent on bourses after declaration of results and is trading at Rs 87.1 on intraday basis.

WCL is engaged in the business of production and coating of submerged arc welded pipes, hot rolled steel plates and coils, and power generation. It has current capacity of 2.425 MTPA in Dahej, Anjar and Mandya in India, Little Rock in the USA and Dammam in Saudi Arabia, Welspun takes pride in being a preferred supplier to most of the Fortune 100 oil and gas companies. The company's manufacturing facilities are located in India, the United States of America and Saudi Arabia.