Welspun Corp soars 37% in 5 days on strong Q3 results; hits over 9-yr high

Shares of Welspun Corp were trading higher for the fifth straight day, rallied 16 per cent to Rs 230, on the BSE on Friday after it reported a robust result for the quarter ended December 2019 (Q3FY20).

The stock of the construction & engineering company was trading at its highest level since December 2010. In the past five trading days, the stock soared 37 per cent, as against a 4 per cent rise in the S&P BSE Sensex.

The company’s consolidated earnings before interest, tax, depreciation, and amortisation (Ebitda) jumped 79 per cent year on year (YoY) at Rs 371 crore for Q3FY20. Ebitda margin, too, improved to 12.8 per cent from 8.63 per cent in the year ago quarter.

Consolidated net profit during the quarter rose four-fold at Rs 234 crore, compared with Rs 57 crore in the corresponding quarter of the previous fiscal. Operational revenues grew 20 per cent at Rs 2,888 crore on YoY basis.

The company has a strong order book position with the current global orders of 1,305 KMT, valued at Rs 10,800 crore  ($1.51 billion), the management said.

The management further said that in order to cater to natural gas demand, major pipeline operators are working on significantly raising pipeline capacity. With significant barriers existing on pipe imports, domestic US pipe manufacturers such as Welspun, are expected to benefit immensely.

"In the domestic water segment, irrigation projects across various states will continue to drive the demand. In addition, focus and allocation under ‘Nal se Jal’ is expected to boost demand in the water sector. In the medium term, river linking could also potentially add to pipe demand," it added.

Meanwhile, the board of directors of the Company has declared an interim dividend at the rate of 200 per cent (Rs 10 per share). It has fixed Thursday, February 13, 2020 as the record date for the purpose of determining the shareholders eligible for interim dividend.

At 03:03 pm, the stock was trading 14 per cent higher at Rs 226 on the BSE. A combined 6.2 million shares have changed hands on the counter on the NSE and BSE till the time of writing of this report.