Welspun Corp (532144) Q4 02/03 earnings summary

Executive summary

• FY03 turnover rose to Rs 39,710.08 lakh from Rs 28,494.47 lakh; production increased 49.53% to 137,756 MT, while steel-price pressure and low H1 utilization constrained profitability.

• Export and deemed-export turnover was 73% of total, at Rs 29,565 lakh; performance improved substantially in H2 after orders from the US and domestic markets.

Financial highlights

• Sales and services were Rs 39,710.08 lakh versus Rs 28,494.47 lakh; other income was Rs 207.58 lakh, and the stock movement was a decrease of Rs 2,054.37 lakh.

• Profit before tax was Rs 103.52 lakh versus Rs 308.56 lakh; profit after tax was Rs 154.70 lakh, including an Rs 59.18 lakh deferred-tax credit and Rs 8 lakh current-tax provision.

• Manufacturing and other expenses rose to Rs 7,230.90 lakh from Rs 5,238.53 lakh; financial expenses fell to Rs 3,651.51 lakh from Rs 4,048.74 lakh.

• No dividend was recommended, citing inadequate profits for the year.

Outlook and guidance

• FY04 turnover growth of over 100% and significant profitability improvement were expected, supported by large-diameter, high-grade orders and improved capacity utilization.

• Two Iran orders and the GAIL order were valued at over Rs 850 crore; a separate US$52.13 million sour-gas export order was scheduled for execution in Q3 FY04.

• EWPCIL expected FY04 turnover to exceed Rs 100 crore, with further profitability improvement.