Welspun Corp (532144) Q4 10/11 earnings summary

Executive summary

• FY11 consolidated revenue from operations rose 9.0% YoY to ₹80,236m; PAT after minority interest increased 3.7% to ₹6,330m.

• Global pipe capacity reached 1.85m tonnes; the order book was ₹5,400 crore at 26 May 2011, with 82% of pipe orders from export markets.

Financial highlights

• Consolidated income from operations was ₹80,236m vs ₹73,637m; reported EBITDA was ₹13,015m vs ₹13,372m, and EBIT was ₹10,575m vs ₹11,311m.

• PAT after minority interest was ₹6,330m vs ₹6,104m; basic EPS was ₹30.95 vs ₹31.69 and diluted EPS ₹28.66 vs ₹28.40.

• FY11 included a ₹734m export rebate after a favourable Supreme Court judgment and a ₹2,008m customer-settlement provision; FY10 included a ₹1,256m forex-provision reversal.

• Pipe sales volume rose 11.5% and plate/coil sales volume rose 25.3%; consolidated operating cash flow was ₹6,746m vs ₹3,843m.

Outlook and guidance

• The ₹5,400 crore order book at 26 May 2011 covered nearly eight months of sales; pipe orders totaled 726k tonnes and plate orders 32k tonnes.

• A 350k-tonne Anjar LSAW line was expected to start commercial production in H1 FY12; total pipe capacity was expected to rise to 2.2m tonnes.

• No further expansion was planned beyond the Anjar LSAW project; regular maintenance capex was projected at ₹100 crore.

• Management cited oil and gas exploration, pipeline replacement, shale gas, and domestic gas and water infrastructure as demand opportunities.