Welspun Corp Q3 net profit soars 5-fold at Rs 87 crore

Pipe maker Welspun Corp today reported a nearly five-fold jump in consolidated net profit at Rs 86.94 crore for the quarter ended December 31, 2015.

The firm had clocked a net profit of Rs 17.49 crore in the year-ago period, it said in a BSE filing.

Total income, however, fell by 11% to Rs 2,032.17 crore in the October-December quarter this fiscal from Rs 2,269.83 crore during the same period a year ago.

Its sale of pipes declined by 17.7% to 2.51 lakh tonnes in the December quarter from 3.05 lakh tonnes during the same period of 2014-15, while the production fell by 12.8% to 2.59 lakh tonnes from 2.97 lakh tonnes.

Welspun Group Chairman B K Goenka said, "We remain committed towards generating shareholder value amidst sluggishness in global energy prices. While there have been delays in project allocation, we continue to explore growth opportunities."

Outlook in a few markets remain positive and the firm aims to maintain a healthy order book, he added.

"We believe our excellent customer connect, focus on quality coupled with cost-optimisation measures and sound financials would be our strengths in a challenging market scenario," Goenka said.

The firm said its current pipe order book position stands at 10.28 lakh tonnes (Rs 6,000 crore). Large orders booked during the period include 2.16 lakh tonnes for an onshore pipeline project in Americas.

On outlook, it said, "Our customer's focus on reducing transportation cost to help them align with low energy prices, coupled with weakness in steel prices, remains amongst the few positive demand drivers for pipeline projects."

The global scenario of delay and rationalised capex for pipeline projects has a few exceptions, including in the MENA region, it added.

While project work on 15,000 KM cross-country gas grid is expected to take definite shape over next couple of quarters, water transmission currently remains the major driver in the domestic market, Welspun Corp said.

For Plate & Coil Mill Division (PCMD), slab availability has improved over past few months enabling the firm to raise its capacity utilisation and providing competitive advantage in some domestic market segments.

Subject to conducive regulatory environment, PCMD capacity utilisation can further improve in the quarters ahead, it added.

Shares of the company today closed 1.90% higher to settle at Rs 102.15 apiece on the BSE.