Welspun Corp Ltd Q3 FY22 Earnings Conference Call Insights

Key highlights from Welspun Corp Ltd (WELCORP) Q3 FY22 Earnings Concall

 Q&A Highlights:

• Abhishek Ghosh from DSP Mutual Fund asked about the outlook for the domestic business as the volumes are muted. Vipul Mathur MD said that the volume was muted in the last couple of quarters due to third wave of pandemic and issues around that. However, now WELCORP is seeing consistent and a steady growth in demand in the oil & gas sector and the CGD sector.

• Abhishek Ghosh from DSP Mutual Fund also asked about the pipeline for the domestic business. Vipul Mathur MD replied that looking at the total bid book, the company is still looking at a book of close to 2 million tonnes globally. For India, the water sector was missing from the company’s portfolio as those investments were not happening, but those will now come up on the table, which will bring additional volume and incremental income.

• Abhishek Ghosh from DSP Mutual Fund asked about the company’s market share for water projects. Vipul Mathur MD said that the company has a strategic geographical position in Madhya Pradesh, Gujarat; Dahej, Anjar. In all these states the company is seeing in uptick in the water demand. In these states, depending on the competitive framework, WELCORP should enjoy close to 20-25% of the market share.

• Bhavin Chheda from Enam Holdings asked about the progress on DI pipe project; the spend and roadmap ahead. Vipul Mathur MD said that on the capex for DI pipe, WELCORP is almost close to INR1,700 crore odd, which is almost 85-90% of the spend. Also, WELCORP said the product will start hitting the market sometime from 1Q23. The company is not seeing any major challenges around the project.

• Bhavin Chheda from Enam Holdings also asked about WSL merger and its status quo. Vipul Mathur MD replied that there have been a couple of hearings, which has happened at the NCLT. Internally, the company is keeping a view that the merger should get completed on or before end of 31 March, 2022.

• Nirav Shah of GeeCee Holdings asked about the breakup of order book plant-wise. Vipul Mathur MD replied that at this point in time, WELCORP has close to 543,000 tonnes of open order book, out of which close to 350,000 tonnes is in India. LR is close to 5,000 tonnes. And in Saudi, order book is close to almost 190,000 tonnes.

• Shivam asked if the steel price increases will have any impact in demand of company’s products. Vipul Mathur MD answered that steel price impact has no significant impact on the P&L as steel is a passthrough for the company either way.

• Saket Kapoor from Kapoor & Company asked about storage revenue and if it’s related to Keystone pipeline and if the company is getting cash or only the provision increase is happening. Vipul Mathur MD replied that Keystone one of it. And added that the company is invoicing them and are getting cash.

• Saket Kapoor from Kapoor & Company also enquired about the fixed cost for the US facilities currently. Vipul Mathur MD answered that the company has almost $2.5 million a quarter kind of fixed cost and it comprises of manpower, statutory taxes and duties.