Welspun Specialty Solutions Ltd (WELSPLSOL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (361 Capital Market): Ladies and gentlemen, good day, and welcome to the Welspun Specialty Solutions Q2 FY '27 earnings conference call, hosted by 361 Capital Market. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Darshan from 361 Capital. Thank you, and over to you, sir.
Anand Darshan (361 Capital): Hello. Thank you, Alvarez, and a warm welcome to everyone on this call. On behalf of 361 Capital, I would like to thank the Welspun Specialty Solutions team for giving us the opportunity towards this interaction. Without taking much time, I would now like to invite Mr. Gautam to introduce the management team. Over to you, Gautam.
Gautam (Welspun Specialty Solutions Limited): Thank you, Anand, and good evening, everyone. On behalf of Welspun Specialty Solutions Limited, I welcome all of you to the company's Q2 and H1 FY '27 results call. Along with me, we have Mr. Anuj Burakia, Chief Executive Officer and Wholetime Director, Mr. Naveen Agarwal, Chief Financial Officer, and Mr. Harish Rungta, Group Head - Investor Relations for Welspun World. I hope you have had a chance to review the investor presentation that was filed with the exchanges. The presentation is also available on our website, and during today's discussion, we may be making references to this presentation. Request all of you to please refer to the safe harbor statement mentioned in our presentation. We will start the forum with the opening remarks by Mr. Burakia, and then we will open the floor for the Q&A. And now, let me hand over the floor to Mr. Burakia. Over to you, sir.
Anuj Burakia (Welspun Specialty Solutions Limited): Thank you, Gautam. Good evening, everyone. A warm welcome to the quarter two and H1 FY '27 earnings conference call of Welspun Specialty Solutions Limited. Thank you for joining us today. I will start with a short overview of the global and Indian macroeconomic environment. I will then cover the industry landscape and our company's performance for the quarter and the half year. After that, we will open the floor for your questions. The IMF's World Economic Outlook, released in October 2026, projects global growth of three 3.1% in 2026 and 3.4% in 2027, compared with 3.5% in 2025. The 2026 estimate is slightly higher than the earlier forecast of 3%. The IMF describes the global economy as resilient, but under strain. The conflict in the Middle East is keeping energy prices high and disrupting key shipping routes, which has pushed global inflation up. Strong investment in artificial intelligence and technology is supporting the activity, but the gains are limited to a few economies. Growth is uneven, and energy importing countries are under the most pressure. Overall, the global outlook remains highly uncertain, and business sentiment is cautious. India is still the fastest-growing major economy. The IMF has raised India's growth forecast for this financial year to 7%.
Anuj Burakia (Welspun Specialty Solutions Limited): 1% supported by strong private consumption and investment. Food and fuel prices are rising. So the RBI increased its inflation projection to 5.2% and raised the repo rate by 25 basis points to 5.5%. Against this backdrop, the export business faced tougher operating environment during the quarter. High energy prices and disrupted sea routes drove freight costs up sharply, and this pushed up raw material and scrap prices. Because these cost increases came in a shorter period of time, could be passed on only partially through selling prices, which put pressure on our margins. Trade barriers also tightened. For the first time, the average safeguard duty on stainless steel bars exported from India to Europe went above 20%, up from a maximum of under 10% before. This has further weakened the sentiment in one of our most important markets and put pressure on finished product prices. Weak sentiment, together with delays in finalizing contracts and in delivery schedules, hurt our tubes sales volume in quarter two. Even so, our bar business performed well. Bar sales volume in quarter two grew by about 20% year-on-year, driven mainly by our growing market penetration. In tubes, our closing order book is about 4 months of volume, with most deliveries scheduled across Q3 and Q4 of this financial year. A good share of it is heat exchanger tubes. These are value-added products, but they take longer to manufacture and deliver. Our team is working closely with our customers to meet spot delivery needs and reach our target sales volume. Our tube bid book is healthy, at about 10 months of volume or more, and most of these projects are due to be finalized this quarter or the next. Given the balance between consumption and capacity, we are confident that export markets will improve significantly and open up more value-added opportunities as conditions gradually stabilize. The domestic market continues to offer strong growth, with some short-term gaps in demand. As India's only integrated manufacturer of extruded stainless steel pipes and tubes, we are well placed to supply complex value-added products for oil and gas, petrochemical, thermal and nuclear power, defense, and other sectors. Now to our performance for the quarter and half year. Total income for quarter two was 242 crores on sales volume of about 8,800 metric ton. For half year, first half of financial year 27, total income was 440 crores on sales volume of about 15,000 tons. The reported EBITDA was about 4 crores for quarter two and 19 crores for first half of FY '27. Cash PAT was 1 crore for quarter two and 10 crores for first half of financial year '27. We continue to widen our product range and grow our customer base. New products included vacuum degassed stainless steel forging ingots and in heavy wall T91 tubes. We added 24 new customers during first half of financial year '27. I am pleased to share that ADNOC, the Abu Dhabi oil and gas major, has approved our pipe product, and we expect approval for tubes very soon. Our SIRIM certification for the Malaysian market is also in progress, with the audit scheduled for November. These certifications and more like these will create more opportunities for our tubular business going forward. During the period, our team won orders for several specialized products. These include long length tubes of up to 24 meters long, moderator heat exchanger tubes for nuclear power, and duplex fin tubes, etc. These orders show our growing technical capability in high-value applications. We have also delivered our first validation order for CGD instrumentation tubing. We are now pursuing commercial orders and more OEM approvals in this segment. We expect the near term to stay challenging because of high energy and freight costs, trade barriers, and cautious customer sentiments. At the same time, several aspects encourage us: a healthy bid book, steady customer engagement, strong domestic market prospects, our progress on product and customer approvals. Our priorities for the coming quarters are
Anuj Burakia (Welspun Specialty Solutions Limited): our bid pipeline into firm orders, raising volumes and capacity utilization. Keep a sharp focus on cost optimization and working capital discipline. We are confident that despite the current environment, WSSL will improve its performance and meet the stakeholders' expectations. Over the medium to long term, global supply chain diversification and India's growing role as a preferred manufacturing destination will open up significant opportunity. We believe Welspun Specialty is well positioned to benefit from these trends. Sustainability remains a key business priority. We continue to increase the share of renewable energy in our operations and to reduce our emissions intensity through better operating efficiency. We expect renewable energy to make up to 2/3, that is about 67% of our total energy use in financial year '27, up from 58% in financial year '26. With that, I would like to open the floor for questions, please. Thank you.
Moderator (361 Capital Market): Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Yash Burji with Yash Burji Investments. Please go ahead.
Yash Burji (Yash Burji Investments): Hello, am I audible?
Moderator (361 Capital Market): Yes, you are.
Yash Burji (Yash Burji Investments): Hi Anup Sir.
Anuj Burakia (Welspun Specialty Solutions Limited): Hello. Welcome.
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