Welspun Corp Ltd has recently announced its consolidated financial results for the year ended 31 March 2022. The company has won a single largest order worth more than INR 5,000 crore for supply of pipes in the US in May.
This order is for supply of approximately 325,000 tonnes (t) of large diameter coated pipes for transporting natural gas from the Permian Basin to Houston. The pipes for this order will be produced from Welspun’s Little Rock plant in the US and the order will be executed over a period of 12 months, commencing H2FY23. This order comes on the back of another win for 26,000 t which the company had announced in April 2022 from a long-standing customer in North America.
Furthermore, the pipes maker is in active discussions for several orders in the exports market amid improved prospects for pipelines due to higher oil prices, increased energy consumption and with Europe looking to diversify its energy supply.
Various expansion projects undertaken by central and state governments on major gas pipelines and irrigation are likely to drive pipe demand in the near term.
Update on projects
1. Ductile iron pipe project: Welspun is setting up a greenfield facility in Anjar to enter ductile iron (DI) pipes business, which is expected to be commissioned by end of June 2022.
2. Integrated long steel plant: The company’s forward integration plan of setting up a TMT bar plant at Anjar with a capacity of 350,000 tpa is on track and expected to begin commercial operations by July 2022.
Q4FY22 highlights
Sales: Sales volume of line pipes aggregated to 269,000 t in Q4FY22, up 58% q-o-q as against 171,000 t in the previous quarter. Meanwhile, SS pipes sales jumped 32% q-o-q to 1,160,000 t in Q4 from 881,000 t a quarter ago.
Company’s global order book position: Welspun’s current global order book position stands at 925,000 t valued at INR 12,250 crores. Active bid books stand at 1,250,000 t.
Boost in steel supply post-15% duty announcement: In order to improve domestic availability of steel, the Indian government recently announced an export duty of 15% on finished steel. This, in turn, will boost API steel supply in the domestic market.
Exports: The company’s total order book for Indian operations stand close to around 350,000 t, out of which almost 50% is allocated for exports.
Diversification: Welspun aims to diversify its product portfolio and plans to expand its offerings from B2B to B2C. In line with this plan, it has acquired Sintex BAPL Ltd’s Senior Secured Unlisted Non-Convertible Debentures with outstanding of INR 1,176 crore for a purchase price of INR 403.16 crore by its wholly-owned subsidiary Mahatva Plastic Products And Building Materials Private Limited.
WSSL SS pipes’ sales up: Welspun Specialty Solutions Limited (WSSL) reported an increase in SS pipes sales volumes by 82% in Q4FY22 and by 50% in FY22 compared to the year-ago period. The pipe maker has reported a growth in its performance in FY22 and has obtained several new customer approvals.
WSSL’s achievements in this quarter:
- Completion of the development and manufacturing of an SS 347H grade shot peened pipe.
- Establishment of extrusion and cold finishing for super duplex stainless steel tubes. It has dispatched its first order.
- Manufacturing of 6-diameter pipes with a stringent acceptance criterion for a critical nuclear power project.
- Entering into another niche market segment by successfully executing first lot of heat exchanger tubes in SS 317L grade.
- Delivering its first order for a prominent company in the fertiliser industry.
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