Welspun Corp shares gained on back of a better than expected performance in the third quarter ended December, 2019. The profits surged and margins expanded significantly.

Welspun Corp Ltd the flagship company of the Welspun Group is the second largest manufacturer of large diameter pipes in the world based in Mumbai, Maharashtra.

The year on year pipe sales for the company were up 26 percent in Q3 and the operating EBITDA came in at Rs 371 crore, up 79 percent YoY. Margins came in at 12.8 percent versus 8.2 percent.

Sharing the numbers and outlook in detail, Vipul Mathur, MD & CEO of the company said, “We operate in 3 geographies – India, Saudi Arabia and America and these have been kicking for last 4-5 trailing quarters, but this quarter was extraordinary, where all the 3 geographies including India ramped up significantly,” said Mathur.

“We did 473,000 tonne of production in the third quarter, which is the highest ever. We did 428,000 tonne of sales, which resulted in an EBITDA of Rs 372 crore odd, which is possibly best among the last 10 years,” he told CNBC-TV18.

When asked about the orderbook position, Mathur said, “We have an orderbook of 1.3 million tonne, which is valued at USD 1.5 billion. We also have a bid book which is more than 24-25 million tonne. We have bid for close to million tonne and we are awaiting outcome from that.”

“As we maintain a bid book of 24-25 million tonne, it gives us confidence that the next 2-3 years are going to be good and that we are looking at a robust growth in this particular segment,” Mathur added.

Talking about other business, he said, “The government will be doing gas grid network and they will be increasing the capacity from 11,000 km to 27,000 km in the domestic market. In water sector, they made an allocation this year for ‘Naal Se Jaal’ scheme, so we will see a lot of traction coming into too. City gas is also exponentially growing and it’s only going to add. Therefore, all these 3 factors put together, the India story looks extremely robust.”

In Saudi Arabia we have a healthy orderbook for next 3 quarters, he said, adding that we are favourably positioned in few of the projects where we are lowest bidders and once they get materialized that would bring in a visibility for additional 4 quarters.

“The US story as well is an ever-growing one, which gives us a visibility that the story is going to sustain for next 3-4 years,” he further added.