Small-cap infrastructure stock specializing in road and water projects surged 2.4 percent after forming a strategic partnership with SmartOps, a UK-based leader in innovative water treatment solutions.
Share price variations:
With a market capitalization of Rs. 6,784.35 crores, Welspun Enterprises Ltd. rose to an intraday high of Rs. 503.50 per share representing a 2.42 percent increase from its previous closing price of Rs. 491.60 per share. Additionally, its shares have surged by 34.5 percent in the last six months and delivered over 50 percent returns on a year-to-date basis.
Reason for the Rise:
According to exchange filings, Welspun Enterprises Ltd, through its subsidiary Welspun Michigan, has partnered with UK-based SmartOps, a leader in innovative water treatment solutions, to introduce modular, scalable, and cost-effective technology in India for converting grey water into a reusable resource. The arrangement includes forming a subsidiary or joint venture under Welspun Michigan Engineers, in which Welspun will hold a 50 percent stake, to implement this technology nationwide.
The board has also approved acquiring an additional 9.99 percent equity stake from Patel Engineering Limited, an existing shareholder in Welspun Michigan, for Rs. 100 crore. This acquisition will raise Welspun Enterprises Limited’s total stake in Welspun Michigan from 50.10 percent to 60.09 percent.
Order Book:
As of September, the company has a consolidated order book value of Rs. 15,200 crores of which 63 percent relates to water projects, 13 percent each represents Road and Tunneling projects and 11 percent relates to projects under Welspun Michigan Engineers.
Recent Projects:
In September, the company secured a project worth Rs. 1,989.90 crore from the Brihanmumbai Municipal Corporation (BMC) for the design and construction of a tertiary treated water conveyance tunnel from Dharavi to Ghatkopar. Additionally,
in August, the company was awarded a Rs. 159.75 crore project through its subsidiary from BMC for the rehabilitation of man-entry sewers.
Financial Performance:
For Q2FY25 the company reported a net profit decrease of 10.79 percent to Rs. 61.56 crores compared to Rs. 69.01 crores in Q2FY24, while revenue from operations marked an increase of 22.11 percent to Rs. 788.51 crores from Rs. 645.73 crores in comparison to the same period.
The company has reported a Return on Equity(ROE) of 13.65 percent and a Return on Capital Employed (ROCE) of 16.39 percent in FY24.
About the company:
Welspun Enterprises Ltd. (WEL), part of Welspun World, is an infrastructure development company focusing on Water, Wastewater, Tunnelling, and Transport segments. The Company also has investments in Oil & Gas Exploration. The company operates mainly in Maharashtra, UP, Bihar, Tamil Nadu, Haryana with other states.
Written By: Joseph Pv
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