The brokerage said that Welspun Corp has established a strong presence in the metal pipes sector by expanding across the value chain.
With a robust capacity arsenal, the company is planning to participate in infrastructure growth in India and energy independence efforts in the US, Nuvama said.Welspun Corp is also aiming to expand from metal pipes into building material products, with Sintex as a frontline growth driver, it said.
In June this year, the company said it was introducing a new product Sintex OPVC over the next nine to 15 months. The company’s managing director and CEO Vipul Mathur said Sintex OPVC is going to be a game changer and that the firm was “very bullish” on it.
In August last year
Welspun Corp said its wholly-owned subsidiary Sintex BAPL was acquiring 100% of the equity shares and non-cumulative redeemable preference shares of Weetek Plastics Pvt. Ltd.Nuvama expects Welspun Corp to start benefitting from its ₹5,500 crore capex program through the financial year 2027.
It also estimates the company’s margins and return ratios to improve by FY28.
With all segments performing well, revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to compound at 21% and 22%, respectively, over FY25-28, Nuvama said.
Welspun Corp’s revenue increased 32.5% to ₹4,373 crore in the second quarter, while its EBITDA grew 47.7% to ₹590.8 crore from the previous year. Its EBITDA margin expanded to 13.5% from 12.1% in the year-ago period.
All six analysts who have coverage on the stock have “buy” ratings.
Shares of Welspun Corp are trading 2.3% higher on Monday at ₹795.45. The stock is still down 2% so far on a year-to-date basis.
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