Feb'25 View on Welspun Corp Ltd

WCL is one of the largest manufacturers of large diameter pipes globally. The company also manufactures BIS-certified Steel Billets, TMT (Thermo-Mechanically Treated) Rebars, Ductile Iron (DI) Pipes, Stainless Steel Pipes, and Tubes & Bars. The company acquired Sintex-BAPL, a market leader in water tanks and other plastic products, to expand its building materials portfolio. It has also made strategic acquisition of specified assets of ABG Shipyard. After falling from high of 835, the stock is now at 725 and roaring to go past 900 on back of following inputs  For Q3FY25, Welspun Corp (WCL)’s reported revenue de-growth of -23.9% yoy to Rs 3,614 cr (which is below our estimates) due to weak volume growth.  WCL reported PAT of Rs672cr which grew by 129% (due one time exceptional income during Q3). .  Robust order book worth more than Rs 15,000 cr including line pipes (India & US), ductile iron (DI) pipes and stainless steel bars & Pipes.  WCL reported EBITDA margin improvement of 228bp YoY due to of lower raw material.  We recommend ADD rating, with revised target price of Rs864.