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Welspun Corp consol. EBITDA came in at INR3.7bn, up sequentially from INR3.3bn. Key takeaways from the call are – a) FY25 guidance maintained – Revenue : INR170bn, EBITDA : INR17bn; RoCE : 20% b) Order book for line pipe segment in Line pipes / DI pipes / SS Bars stands at INR57bn / INR25bn / INR3bn respectively (ex Saudi Arabia) c) EPIC (Saudi Arabia) has a confirmed order book for more than 2.5 years. d) US - firm order book till 3QFY25 and confident of booking new orders to ensure business continuity in CY2024 e) Sintex - aim to maintain the growth rates of FY24 and grow faster than the market – capex of ~INR23bn to be spent in two years with first phase to be commercialized by the end of the year. Consol. annual capex guidance maintained at INR15-20bn. Net debt stood at INR5bn vs INR3.8bn in 4Q. Improved scale across businesses buoyed by macros will help capitalize on operating leverage, while strong cash flows will further reduce financial leverage. Maintain BUY.

* Margins improve tracking lower costs: Consol. sales came in at INR31.3bn down 29% QoQ primarily tracking lower volumes. EBITDA came in at INR3.7bn up 13% QoQ given lower raw material costs. Consequently Adjusted PAT came in at INR2.5 bn. Volumes for line pipe business stood at 165ktons vs 302ktons in 4Q given seasonally higher base in 4Q. DI pipe volume stood at 64kt vs 66kt in 4Q. Standalone sales came in at INR20.7bn down 28% QoQ. EBITDA came in at INR2.0bn up 52% QoQ, largely tracking lower raw material costs. Standalone PAT came in at INR1.1bn vs INR1.9bn in 4Q.

* Segmental order book remains robust, driven by favourable macro tailwinds: (a) Line segment: Consolidated Order book stood for India and US stands at 497ktons valued at INR57bn vs 528ktons valued at INR61bn in 4Q (b) DI Pipe: Current order book for DI Pipes stands at 300ktons valued at ~INR25bn vs 328ktons valued at ~INR27bn during 4Q. (c) Stainless steel pipes and bars: With expansion in current as well as new geographies company continues to witness healthy turnaround with current order book at 6.8ktons valued at ~INR3bn vs 5.6ktons valued at ~INR2.1bn during 4Q. (d) TMT Bars: Steady growth expected given increased focus on infrastructure projects by Government and increasing supplies in Gujarat. Volumes stood at 57ktons up ~36% QoQ.

* Sintex to accelerate foray into Plastic Pipes: Sintex continue to focus on improving market share with acquisition of Weetek Plastics Pvt. Ltd. (WPPL) to accelerate its foray into building materials and plastic pipes segment. WPPL is into manufacturing of plastic pipes (CPVC, UPVC, SWR) with a combined capacity of 19ktpa in Raipur, Chhattisgarh.

* Growth capex on track: Company earlier approved brownfield expansion of DI pipe segment by 100Ktpa leading overall capacity to 500Ktpa to tap-in market share in smaller diameter pipe segment. In addition to above, company approved expansion of DI Pipes capacity by 100Ktpa without any additional capex. Consol. annual capex guidance maintained at INR15-20bn.

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