Shares of an infrastructure development company focusing on road, water and wastewater segments surged 6 percent on BSE to Rs. 590 on Monday, after the company emerged as the Lowest Bidder (L1) by the Brihanmumbai Municipal Corporation for a project worth ~Rs. 1,989.9 crores.
With a market capitalisation of Rs. 7,846.7 crores, at 11:05 a.m., the shares of Welspun Enterprises Limited were trading in the green at Rs. 566.9, up by nearly 1.8 percent, as against its previous closing price of Rs. 556.65.
What’s the News:
According to the latest regulatory filings with the stock exchanges, Welspun Enterprises Limited was declared as L1 bidder by the Brihanmumbai Municipal Corporation for a Design and Build (DB) contract valued at nearly Rs. 1,989.9 crores.
This contract involves designing and constructing the Tertiary Treated Water Conveyance Tunnel from the Dharavi Waste Water Treatment Facility (WWTF) to the Ghatkopar WWTF.
The primary scope includes the design and construction of an 8.48 km tunnel with a bored diameter of 3,500 mm, to be executed within a period of 93 months using a tunnel boring machine.
Financials:
The company reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 30 percent, rising from Rs. 699 crores in Q1 FY24 to Rs. 907 crores in Q1 FY25.
The revenue of Welspun Enterprises increased at a CAGR of around 20 percent from FY21 to FY24, with Rs. 720 crores cash on hand, and positioning itself to capture emerging opportunities in India’s water & transportation needs.
During the same period, the company’s net profit rose from Rs. 93 crores to Rs. 110 crores, reflecting a growth of 18.3 percent YoY.
The company experienced higher profitability, with an average profit after tax (PAT) margin of nearly 13.3 percent over the last four years. Additionally, it returned over Rs. 700 crores through dividends and buybacks from FY18 to FY23.
As of Q1 FY25, with a robust portfolio of road and water projects,
Welspun’s standalone order book reached approximately Rs. 11,600 crores, with the water segment accounting for 70 percent of orders and the road segment making up the remaining 30 percent. In contrast, its consolidated order book was nearly Rs. 13,100 crores as of Q1 FY25.
Future Growth:
Looking ahead, Welspun Enterprises maintains its focus on both development and EPC projects, adopting a prudent bidding strategy to strengthen its portfolio. The company is strategically positioning itself towards build-operate-transfer (BOT) and EPC projects, with water and wastewater expected to be the key growth drivers and focal areas.
In the water segment, the management sees opportunities exceeding Rs. 3 lakh crores across distribution, transmission, and treatment. Of this amount, Rs. 66,000 crores may be bid out in the near term, while the remainder is expected to extend into the medium term.
Stock Performance
The stock has delivered positive returns of nearly 98.4 percent of returns in one year, as well as around 81.8 percent returns in the last six months. So far in 2024, the shares of Welspun Enterprises have given positive returns of about 73.8 percent.
About the Company:
Welspun Enterprises Limited is engaged in the business of road and water infrastructure development (Engineering, Procurement and Construction (EPC) and Build, Operate and Transfer (BOT) basis.
The company is also engaged in carrying out Operation and Maintenance (O&M) activities for the transportation sector and water infrastructure projects.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
