The Hindu Business Line : Welspun-Gujarat Stahl Q2 net profit zooms

Report card: Mr B. K. Goenka (right), Vice-Chairman & Managing Director, Welspun Gujarat Stahl Rohren Ltd, with Mr Braja Mishra, CEO & Executive Director, at a press conference in Mumbai on Monday. - Paul Noronha

Our Bureau

Mumbai, Oct 15 Pipe manufacturer Welspun-Gujarat Stahl Rohren Ltd, logged a 146 per cent rise in net profit at Rs 82.5 crore for the quarter-ended September 30, 2007 against Rs 33.5 crore logged for the same quarter the previous year. Net sales were up 38 per cent at Rs. 927.6 crore (Rs. 674.4 crore).

The company pegged the performance to the commissioning of a 43-MW lignite-based power plant and execution of major orders for oil majors such as Exxon Mobil, Kinder Morgan and Reliance Industries Ltd. This quarter’s production of 183,000 tonnes was also the highest ever.

Expansion plans

The company is gearing to increase its LSAW (longitudinal) pipe capacity by 300,000 tonnes at the SEZ in Gujarat, which is expected to become operational by March 2009 with an investment of Rs 298 crore. It has also taken up capacity expansion and de-bottlenecking of HSAW (Spiral) pipes at its existing facility at Anjara at a cost of Rs 100 crore. Post expansion, HSAW capacity will increase to 550,000 tonnes from 400,000 tonnes. Funding for the expansion will be a mix of internal accruals and long-term loans.

Trial production of its plate-cum-coil mill to produce 4.5 metre wide plates has begun. This 1.5-MTPA facility will be fully operational this year end and is expected to contribute significantly in fiscal 2009.

Similarly, the implementation of a 300,000-tonne project in Little Rock, Arkansas, is as per schedule and the facility is likely to be commissioned by July 2008. Post completion of US and India projects, the company’s capacities will reach 1.6 MTPA, making it one of the largest line pipe companies in the world.

Mr B.K. Goenka, Vice-Chairman & Managing Director said, “The first halt of the year has been outstanding, we not only achieved excellent financial results but also sowed seeds for our future growth by bagging prestigious orders and embarking new capacity additions.”

On the BSE, the company stock closed at Rs 339.65 on Monday, up 1.33 per cent over previous close.