Welspun Corp Bags Rs 1,400 Crore US Order for Pipeline Project, Strengthens Global Position

Welspun Corp Secures Major Order in the US

Welspun Corp Ltd. announced on October 1 that it has secured a substantial order worth Rs 1,400 crore in the United States. The order involves the supply of coated Helical Submerged Arc Welded (HSAW) pipes for a major natural gas pipeline project. This win is set to be executed during the current fiscal year as well as in FY26, highlighting the company’s strengthening foothold in international markets.

Strengthened Market Position in the USA

The recent order in the US further underscores Welspun Corp credibility and solidifies its position as a leading player in the US market for line pipes. In its stock exchange filing, the company expressed confidence in the continued growth of its US operations and shared its optimism regarding future project bids in the region. Welspun Corp favorable positioning in upcoming bids hints at a promising pipeline of contracts that could be secured in the near future.

Consecutive Order Wins Reflect Robust Business Momentum

This announcement follows another significant order win just a day earlier. On Monday, Welspun Corp reported receiving an order from the Middle East for the supply of coated Longitudinal Submerged Arc Welded (LSAW) pipes and bends. With these orders combined, the cumulative value of its line pipe orders in India and the US stands at Rs 1,348 crore. These orders are slated to be executed during FY25 and FY26, ensuring a solid pipeline of work for the company in the upcoming years.

Order Book Boosts Revenue Visibility

As of June 30, 2024, Welspun Corp’s globally confirmed order book stood at 0.497 million metric tonnes (MMT) for line pipes, 0.300 MMT for ductile iron (DI) pipes, and 6,791 metric tonnes for stainless steel bars and pipes. This translates into an overall order book valued at Rs 8,508 crore, offering medium-term revenue visibility. Furthermore, the company maintains an active bid book, especially in the oil and gas (O&G) and water segments, which is a testament to its diversified operations across key sectors.

Growth Drivers Across Geographies

Welspun Corp’s operations cater to different regional demands, reflecting the company’s strategy of geographic and product diversification. In the Indian market, the demand for large-diameter pipes is driven by the development of gas grids and oil pipelines by domestic oil companies, while small-diameter pipes are in demand for city gas distribution (CGD) projects. The company’s operations in the US are focused on the O&G sector, while its Saudi Arabian operations are primarily driven by water infrastructure projects from the Saline Water Conversion Corporation (SWCC).

Stock Performance and Market Sentiment

Following the announcement, Welspun Corp’s shares hit a fresh all-time high of Rs 794.75 on the National Stock Exchange (NSE) on October 1. However, the gains were short-lived, with the stock closing down by 1% at Rs 760 per share. Despite this minor correction, Welspun Corp’s stock has risen by 37.5% in 2024. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.