Share of this smallcap company jumped up to 1 percent in Monday’s trading session after announcing to set up a manufacturing facility in Madhya Pradesh for Rs 400 crores. The shares have delivered a multibagger return of 165 percent in one year.
With a market capitalization of Rs. 14,135 crores, the shares of Welspun Corp Ltd started Monday’s trading session on a higher note at Rs. 543 compared to its previous close of Rs. 540.60. During the trading session, the shares hit a high of Rs. 547.30, gaining around 1 percent and are currently trading at Rs. 543 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that the company’s step-down subsidiary, Sintex Advance Plastics Limited (SAPL), proposes to set up a manufacturing facility for plastic pipes and water storage tanks in Madhya Pradesh for an approx. investment of Rs 400 crore.
The project is likely to be implemented over the next six quarters and create employment opportunities for about 350 people.
Coming onto the company’s financial statements, the revenue increased by 17 percent from Rs. 4,059 crores during the September quarter to Rs. 4,750 crores in the December quarter. On a contrasting note, the net profits declined by 24 percent from Rs. 387 crores to Rs. 294 crores during the same timeframe.
On March 15, 2023, 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 a strategic acquisition of specified assets of ABG Shipyard.
Furthermore, the company has been focusing on Ductile Iron Pipes (DI Pipes) for its aggressive growth plans and approved a plan to set up 150 KMTPA DI Pipes manufacturing facilities in the Middle East Region with an investment of approx. Rs. 500 crores spread over the next four to six quarters.
Welspun Corp Ltd’s order book for the line pipe segment in India, the US, and Saudi Arabia stands at about 2 to 3 quarters, valued at Rs 7,200 crores and the DI Pipes order book stands at over 1 year of execution, valued at Rs. 2,200 crores.
Looking at the company’s important financial ratios, the return on equity was at 3.21 percent during FY22-23 and during the same period, the return on capital employed was recorded at 6.38 percent. Moreover, the net profit margin was at 1.50 percent in FY22-23.
Headquartered in Mumbai, Welspun Corp was incorporated in 1995. The company 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 and Bars.
Written By Vaibhav Patil
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