Future prospects of Welspun Gujarat?

Query: What are the future prospects of Welspun Gujarat? Sanjay Chawla

Thebullishtrends: Welspun Guarat share price closed on Friday at Rs.458. Welspun Gujarat Stahl rohren Ltd incorpated in 1995, part of $ 1 .04 bn Welspun Group which caters to the global requirement of Welded Tubes and Pipes. The company has the widest range starting from 1/2 inch to 100 inch of outer diameter it manufactures high grade line pipes-Submerged Arc Welded (both spiral and longitudinal), branch pipes (Electric Resistant Welded Pipes-ERW) and coating.

Welspun Gujarat's manufacturing facilities are located in Gujarat (Western India), in proximity to the National Highway and Seaports.It incorporates the very best technology across the globe with Capello Tubi Italy and SMS Meer Germany (Mannesmann Demag) and EUPEC, Germany.
It is having strong order book from Middle East, U.S., Indonesia and other countries
Approved by more than 40 Oil & Gas majors across the globe and it supplied pipes for World's Deepest Gas Pipeline in Gulf of Mexico, US.

Welspun Gujarat is having very good customer base which includes global buyers such as BP, Exxon Mobil, Shell, Saudi Aramco, Gazprom, and Total among others. On the domestic front, Welspun is a key supplier to India 's largest fuel companies such as GAIL, IOCL, ONGC and BPC.

Welspun Gujarat is having sound financials. Operating profit margins of the company is growing Q on Q basis, it posted Rs.82.50 cr on Rs.927.60 cr EPS(TTM) 13.67 discounts the present price by 33.39 times on face value of Rs.5 shares.


The Steel Pipe major Welspun Gujarat(as per Religare reseach repot) may post for the quarter ended December '07. (Q3FY08) revenues are expected to go up 50.4 at 1113.1 crore (Rs 11131 million) on YoY basis.During the same quarter, its net profit is seen up 125.7% at Rs 93 crore (Rs 930 million), YoY.

Welspun Gujarat is close to overseas acquisition worth of USD 100 million once this deal finalised the company will get more benefits. Welspun Gujarat is having sound order book position worth of Rs.2000 cr it is having strong foot hold in Saw Pipes business which is having strong demand as Oil and Gas sector is growing very well. The company is having to set up a steel plant.

Having sound financials and sound order book, strong expansion plans you can hold this scrip for decent gains in medium to long run.