Shares of Welspun Corp Ltd were trading in the red and 3% lower on 8 August despite the company announcing a 47% year-on-year increase in net profit for the quarter ended 30 June. 

In its quarterly earnings for April-June, the company reported a 47% YoY increase in net profit to Rs 247.94 crore for the quarter under review from Rs 168.45 crore reported in the same quarter last year. The surge in net profit was mainly due to lower expenses incurred during the quarter. 

However, the revenue from operations of the company during the quarter declined to Rs 3,179.67 crore, marking a 22% YoY decline from Rs 4,118.78 crore reported in the same quarter last year. 

Welspun Corp managed to bring their expenses down from Rs 3,878.67 crore to Rs 2,914.50 crore in just one year.

B K Goenka, Chairman of Welspun Group, said: “I am happy to share that our Q1FY25 performance has been stable and satisfactory and in line with the guidance for FY25. This has been possible due to consistent ramp up in our new businesses driven by DI Pipes divisions.” 

The focus is still on expanding the distribution network and launching new products, which has allowed Sintex to grow at a higher rate than the market as a whole.

As per the Securities Purchase and Subscription Agreement dated 7 August, Sintex-BAPL Limited, the wholly owned subsidiary of Welspun Corp Limited, has made the decision to subscribe for a specific number of Optionally Convertible Debentures (OCDS) to be issued by Weetek Plastics Pvt Ltd (WPPL) and purchase all of the equity shares and non-cumulative redeemable preference shares of WPPL.

The enterprise value of WPPL, which is fixed at Rs 85 crore, will be used to determine the acquisition price of the securities and the subscription price for the OCDS at closing. After that, the amounts may be adjusted, among other things, to reflect WPPL’s outstanding debt, as specified by the SPSA.

Plastic pipe manufacturer WPPL will become a fully owned step-down subsidiary of WCL following the purchase.

The business added that it has an order book for 300 KMT of ductile iron (DI) pipes and 497 KMT of line pine, valued at Rs 2,495 crore and Rs 5,710 crore, respectively. The company has 6,791 KMT of bars and pipes in its order book worth Rs 303 crore.

At 2:45 pm, the shares of Welspun Corp were trading 0.30% lower at Rs 649.65 on NSE. 

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