Welspun Enterprise drops after Q4 PAT slumps 54% YoY

Welspun Enterprises (WEL) skid 4.07% to Rs 113 after the company's consolidated net profit tumbled 54.04% to Rs 40.94 crore on 20.84% rise in revenue from operations to Rs 568.82 crore in Q4 March 2021 over Q4 March 2020.

Profit before tax tanked 29.15% to Rs 63.47 crore in Q4 FY21 as against Rs 89.59 crore in Q4 FY20.

During the financial year, Welspun Enterprises' consolidated net profit declined 13.86% to Rs 130.18 crore on 15.38% fall in revenue from operations to Rs 1,529.51 crore in FY 2021 over FY 2020.

Welspun Enterprises recorded its highest ever EPC order book (excl. Kozhikode project) of Rs 8,437 crore as on 31 March 2021 with Rs 5,893 crore in road and Rs 2,544 crore in water segment.

The company's cash and cash equivalents stood at Rs 375 crore in 31 March 2021 as against Rs 529 crore in 31 March 2020 and Rs 198 crore in 30 December 2020.

Its net debt was at Rs 227 crore in 31 March 2021 compared with Rs (219) crore in 31 March 2020 and Rs 304 crore in 30 December 2020.

In its outlook, the construction major stated that currently there are around 27 Hybrid Annuity Model (HAM) projects of National Highway Authority of India (NHAI) with a total project cost of Rs 31,000 crore, whose bids have been announced. Welspun Enterprises is selectively targeting to participate in bidding of a few projects, while preserving its threshold return expectations. Apart from NHAI, Welspun Enterprises (WEL) is also evaluating road HAM projects of State and Municipal agencies.

On the water segment, the Jal Shakti Ministry's "Har Ghar Nal se Jal" scheme of providing drinking water access to all by 2024, is expected to result in a potential opportunity of more than Rs 6 trillion over the next four years. WEL will actively focus on these projects while continuing to explore inorganic growth opportunities, through a measured evaluation of risk-return parameters.

Commenting on the Q4 performance, B.K. Goenka, chairman of Welspun Group, said: "FY21 was a challenging year in many ways, we progressed and emerged stronger. Over the next few years we see significant opportunity in infrastructure and aim to achieve operational excellence through them. We are optimistic about the company's growth buoyed by the growth in outlay in the National Infrastructure Pipeline. Our robust order book provides visibility of delivering sustainable growth over the next couple of years thereby creating long-term value for our stakeholders."

Meanwhile, the board has recommended a dividend of Rs 1.50 per equity share.

Welspun Enterprises part of the Welspun Group, is an operating company in the infrastructure business.

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