November 2010 - Welspun

On The Path of Global Leadership… 

WELSPUN CITY, ANJAR 

November 2010 Page 1

Disclaimer 

Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements,” including 

those relating to general business plans and strategy of Welspun Corp. Limited (“WCL"), its future outlook and growth prospects, and future 

developments in its businesses and its competitive and regulatory environment. Actual results may differ materially from these forward-looking 

statements due to a number of factors, inter alia including future changes or developments in WCL's business, its competitive environment, its ability 

to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India. 

This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer invitation, or a solicitation of any offer, to 

purchase or sell, any shares of WCL and should not be considered or construed in any manner whatsoever as a recommendation that any person 

should subscribe for or purchase any of WCL's shares. Neither this presentation nor any other documentation or information (or any part thereof) 

delivered or supplied under or in relation thereto shall be deemed to constitute an offer of or an invitation by or on behalf of WCL to subscribe for or 

purchase any of its shares. 

WCL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the 

fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation, 

unless otherwise specified is only current as of the date of this presentation. WCL assumes no responsibility to publicly amend, modify or revise any 

forward looking statements contained herein, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise 

stated in this document, the information contained herein is based on management information and estimates. The information contained herein is 

subject to change without notice and past performance is not indicative of future results. WCL may alter, modify or otherwise change in any manner 

the content of this presentation, without obligation to notify any person of such revision or changes. This presentation may not be copied and 

disseminated in any manner. 

THE INFORMATION PRESENTED HERE IS NOT AN OFFER INVITATION OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY 

EQUITY SHARES OR ANY OTHER SECURITY OF WCL. 

This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan. 

These materials are not an offer or solicitation of any offer of securities for purchase or sale in or into the United States, Canada or Japan. 


Welspun Group 

Brief Synopsis 

• One of the fastest emerging global groups, with multiple 

countries strategy and manufacturing facilities 

• Group companies enjoys market leadership positions : 

• Top 2 Large Diameter Pipe Company in World - 

Financial Times, UK 

• Globally renowned towel company 

• Global relationship with marquee clients including Fortune 

100 companies like Exxon Mobil (Golden Pass Pipeline), 

Chevron, Shell, Bechtel, Wal- Mart, Target etc 

• Equity investment by renowned investors like ICICI Life, 

Temasek (Govt. of Singapore), 3i (UK), Genesis (UK) 

• Excellent relationship with domestic and international lenders 

Global Recognitions 

Welspun Corp Star Performer Award for the year 2008-09 

All India Export Excellence Awards - EEPC 2010 

Welspun Corp 

Economic Times “Emerging Company of the Year Award” 

for Corporate Excellence - 2008 

Welspun India Gold Trophy for “Best Exporter” – 

Textile Promotion Council (TEXPROCIL) – 2008 

Welspun Corp 

2nd Largest (Large Diameter) Line Pipe Manufacturer 

in the World - Financial Times UK - 2008 

Welspun India Supplier of the Year Award – J C Penny - 2008 

Key Markets 

• 80% export mainly to US, Europe, Latin America, Middle East 

etc 

International Setup 

• Christy, UK 

• Sorema, Portugal 

• Textile facility in Mexico 

• Office in Manhattan-NY, Huston-US 

• Pipe facility in Arkansas, US 

• Pipe Facility in Saudi Arabia (In process) 

Welspun India 

Earth Care Awards – Times of India and 

Jindal Steel Ltd - 2008 

Welspun India Sustainability Award - Walmart - 2007 

Welspun Corp One of the fastest growing large companies in India – 

Business Today - 2007 

Welspun India 4 Gold Trophies for Outstanding Export Performance – 

Textile Promotion Council (TEXPROCIL) - 2007 


WCL – An Introduction 

• WCL, flagship company of Welspun Group, is one of the 

largest pipe manufacturing company in the world 

• Incorporated in 1995, the Company offers a complete range 

of high grade line pipes ranging from ½ inch to 100 inch 

used inter alia for transmission of oil & gas 

• Partner of Choice for more than 50 Oil & Gas Giants across 

the globe with a geographically diverse client base including 

Chevron, Exxon Mobil (Golden Pass Pipeline), Saudi Aramco, 

British Gas , Kinder Morgan etc 

• International footprint 

• Accredited with ISO 9001, ISO 14001 and OHSAS 18001 

certifications 

• Strong order book of U.S. $ 1.0 Bn 

Shareholding Pattern, as on Sept. 30, 2010 

Steady Growth in Revenues and Profit 

Consolidated Total Revenues 

(INR MM) 

80,000 

60,000 

40,000 

20,000 

0 

US $ MM 

Gross Profit 

12,500 

9,500 

6,500 

3,500 

500 

CAGR (07-10): 40% 

26,834 39,945 

57,395 

73,503 

42,742 

2006-07 2007-08 2008-09 2009-10 H1 2010-11 

(2) 

(3) 

(4) 

617 991 1,250 

(INR MM) CAGR (07-10): 62% 

US $ MM 

2,666 

5,845 4,768 

11,301 

6,747 

2006-07 2007-08 2008-09 2009-10 H1 2010-11 

(2) (3) 

(4) 

61 145 104 

150 (6) 

Summary Market Statistics 

(5) 

1,637 

252 (5) 

951 (6) 

35.41% 

40.83% 

Promoter 

Mutual Funds 

As of Oct 29, 2010 INR MM US$ MM (6) 

Share Price (INR/ US$) 249.05 5.54 

FII 

Market Capitalization 50,945 1,134 

19.54% 

Public, Banks and 

Financial Institutions 

Enterprise Value (1) 58,294 1,297 

4.22% 

Note 

3. Average exchange rate of US$1 = Rs.40.29 from 01-Apr-07 till 31-Mar-08 

Note 


1. Net Debt at INR 7,349 MM as on 31 Mar, 2010 


2. Average exchange rate of US$1 = Rs 43.51 from 01-Apr-06 till 31-Mar-07 

November 2010 6. Exchange rate of US$1 = Rs. 44.935 as on 30 th Sept 2010 

Page 4

Corporate Structure 

Products 

Manufacturing Facilities 

WCL – An Introduction 

Promoters (40.83%) Welspun Corp Limited (WCL) 

Public and Others (59.17%) 

WCL – 100% WCL – 100% 

Welspun Pipes Inc, USA 

Welspun Plate and Coil Mill 

Division 

Manufacturer of state-of-art 

Plates and Coils 

Welspun Natural Resources 

Pvt. Ltd. 

Oil & Gas Exploration Activities 

Welspun Energy Ltd 

Solar & Renewable Energy 

100% Beneficial Interest 100% Beneficial Interest 

WCL – 100% 

Welspun Tubular LLC 

Manufacturer of Pipes, 

Coating and Double jointing 

Welspun Global Trade LLC 

Welspun Pipes Ltd. 

Proposed LSAW plant 

Welspun Infratech Ltd. 

Infrastructure (MSK) 

Pipes 

- Longitudinal (LSAW) 

- Helical / Spiral (HSAW) 

Plates & Coils 

Oil and Gas 

Renewable Energy & 

Infrastructure 

- Electrical (ERW) 

Anjar & Dahej Pipe Mills 

• Premier integrated set-up for manufacturing welded 

pipes. Installed state-of-the-art-technology and is 

completely geared to meet the requirements of the 

global industry. 

• The Longitudinal Pipes division (LSAW) has a 

capacity of 350,000 metric ton per annum. 

• The Spiral Pipes division (HSAW) has a capacity of 

550,000 metric ton per annum. 

• The ERW Pipes division has a capacity of 200,000 

metric ton per annum. 

• It also has Coating capabilities 

Little Rock , Arkansas, USA 

• With manufacturing facility on a 740-acre site adjacent 

to the Little Rock Port Authority, the $150 million 

facility commissioned in February 2009. 

• This API certified facility currently employs more than 

300 people and is capable of producing 350,000 tons 

of HSAW pipes annually for the use of the oil and gas 

industry. 

• The facility can produce Pipes from 24 to 60 inches as 

outer diameter; 6 mm to 25 mm as wall thickness and 

length of 40 -80ft. 

• It also has Coating and Double Jointing capabilities 

and is a one-stop-solution provider to Welspun's 

valued customers 

Dammam, Saudi Arabia 

• Manufacturing facility of 300,000 tons of 

HSAW pipes annually for the use of the oil 

and gas industry. 

Plate-cum-Coil Mill 

• This backward integration at Anjar, Kutch, 

Gujarat, India has annual capacity to 

produce 1.5 million tones of Plate and Coil 

with plates (up to 4.5 meters wide, 140 mm 

thickness) and Coil (up to 2.8 meters wide, 

25 mm thickness) with strength of 120,000 

PSI. 

• This mill can cater to high end specialized 

product requirement of Line Pipe Industry 

(API grades), Shipping, Heavy construction, 

Bridges, Boiler plates, Wind blades etc. 


8 

Growth at Infinity 

Revenue 

Rs. 42,742 mn. 

H1 FY 2010-11 

Rs. 73,503 mn. 2010 

Rs. 57,395 mn. 2009 

Growth 

- 100,000 tons HSAW Plant in Karnataka 

operational 

Investment in Middle East with HSAW 

capacity of 300,000 MT 

- 350,000 MT pipe capacity addition under 

implementation in India 

Foray into infra & pipe laying for O&G and 

water through MSK Projects India Ltd. 

350,000 tons US Spiral Mill commissioned 

Rs. 39,945 mn. 2008 

150,000 MT Spiral Mill commissioned 

Commissioning of Plate Mill & 43 MW Power Plant 

Rs. 26,834 mn. 

2007 

Anjar Facility , A Key Contributor 

Rs. 18,298 mn. 

2006 

Approvals from O&G majors for new facility 

Rs. 10,385 mn. 

2005 

New Capacity at Anjar, Gujarat for HSAW & Coating 

Rs. 8,277 mn. 

2004 

Merger of coating J.V. with WCL 

Rs. 2,565 mn. 

Rs. 585 mn. 

Rs. 180 mn. 

1998 

2000 

2001 

Pipe Coating in JV with EUPEC, Germany 

Dahej, Gujarat 

LSAW, Dahej, Gujarat 

HSAW, Dahej, Gujarat 

Incorporated 

1995 

Embarked on a Growth Journey 


Welspun Corp Limited: Strong Value & Growth Story 

1 

Strong Industry Fundamentals 

2 

Robust Business Fundamentals & Healthy Order Book 

3 

Global Footprint & Pre Approved with Oil & Gas Majors 

4 

Strong Management Team with Proven Execution Capabilities 

5 

Exponential Growth in Revenues & Margins 


1. Strong Industry Fundamentals 

Relatively Few Major Players 

• Industry is highly capital intensive with high barriers to 

entry 

• Niche markets exist which have been effectively 

exploited by Welspun 

• Reliability and reputation for excellence are 

paramount, as pipelines are used for critical 

applications such as oil and gas transport 

• Prospects for the industry brightening with oil prices 

gaining strength 

Global Demand 

• Business potential of around USD 88 Bn (3) - Simdex 

• Replacement of the old pipelines in US 

• New Gas is required to replace annual decline in 

existing gas supplies in North America, which shall 

enhance demand for new pipelines 

• Shale Gas gradually increase its share in total gas 

requirement in US 

• Alaska Pipeline project -another boost to the demand 

for pipes 

Domestic Demand 

• Low pipeline penetration in India provides huge 

potential 

• Natural Gas as a source of energy is growing at a rapid 

pace and shall grow the demand for pipelines 

• Formation of the Petroleum & Natural Gas Regulatory 

Board (PNGRB) to give boost to trunk pipelines 

• City Gas Distribution set to take-off 

• Liquefied Natural Gas (LNG) terminals projects to 

enhance pipe demand 

• Water Infrastructure projects: A Key driver for HSAW 

pipes 

Source: Industry Sources 

Company 

Welspun is well placed, with global clients and state-ofthe-art 

technology, to capitalise on this opportunity 

International Demand Outlook till 2015 

Region 

Projects 

Total 

Length 

(kms) 

Total Length 

(kms) 

Quantity 

(MMT) (1) 

Quantity 

(KMT) (1) 

Business 

Potential 

(US$ Bn) (2) 

North America 244 79,758 16 19 

Latin America 62 34,466 7 8 

Europe 139 48,778 10 12 

Africa 68 28,213 6 7 

Middle East 145 49,953 10 12 

Asia 192 108,761 22 26 

Australasia 59 18,315 4 4 

Total 909 368,244 74 88 

Source: Simdex, US, Sept 2010 Update 

Domestic Market Size 

Business 

Potential 

(US$ Bn) (2) 

GAIL 6,663 1,332 1.6 

RGTIL 2,750 550 0.7 

GSPL 5,675 1,135 1.4 

Total 15,088 3,017 3.7 

Source: GAIL India Ltd Presentation Aug 10 / Company data 

Share of Expected Demand 

Until 2015 

Asia 

30% 

Middle East 

14% Africa 

8% 

Proposed pipeline of GAIL 

Phase I by 2011 (Under Execution) 

Name of Pipeline 

Length 

(Kms) 

Cost 

(Rs Cr) 

Add. Cap 

(MMSCMD) 

DVPL Ph -II / Vijaypur Dadri 1,115 10,830 80 

Dadri - Bawana - Nangal 646 2,349 31 

Chainsa - Jhajjhar - Hissar 349 1,259 35 

Sub Total 2,110 14,438 146 

Phase II by 2012 (Approved in 2009) 

Name of Pipeline 

Australasia 

5% 

Source: Simdex, US, July 2010 Update 

Length 

(Kms) 

North America 

22% 

Europe 

16% 

Latin America 

9% 

Cost 

(Rs Cr) 

Add. Cap 

(MMSCMD) 

Jagdishpur - Haldia 2,050 7,596 32 

Dabhol - Bangalore 1,389 5,014 16 

Kochi - Mangalore - Bangalore 1,114 3,263 16 

Sub Total 4,553 15,873 64 

Grand Total 6,663 30,311 210 

Source GAIL India Investor Presentation , August 2010 

Note 

1. Conversion rate of 200 tonnes / km 2. Conversion rate of $1,200 / ton 3. As illustrated in the adjoining tables 


2. Robust Business Fundamentals & Healthy Order Book 

Strongly Positioned 

• Welspun serves several marquee 

customers like Exxon Mobil (Golden 

Pass Pipeline), Kinder Morgan, Ruby 

(El Paso) and GAIL because of its 

specialized offerings 

• It has long term contracts with giants 

like TransCanada; and framework 

agreements with Chevron, Saudi 

Aramco, etc 

• Successfully expanded into highly 

competitive North and Latin America to 

take advantage of higher realizations 

Current Capacities 

‘000 MT pa 

2,200 

1,800 

1,400 

1,000 

600 

200 

(200) 

350 

350 

300 

1,000 

200 

650 

LSAW HSAW ERW Total 

Pipe 

Existing Capacity 

1,550 1,500 

Plate Mill 

Proposed Capacity 

Going Strength to Strength 

Oil & Gas Co 

Approval 

Production 

( '000 MT) 

Revenue 

(US$ MM) 

PAT 

(US$ MM) 

No. of countries 

FY07 FY09 FY10 

36 >50 >50 

501 717 814 

571 1,250 1,637 

36 47 136 

Glob 

al 

Global 

Global 

Export Market 67% 76% 77% 

Production Growth 

Export Market Gaining Dominance 

‘000 MT 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

814 

670 

718 

501 

508 

377 

384 

193 

228 

FY06 FY07 FY08 FY09 FY10 H1 FY11 

Pipes Plates 

100% 

80% 33% 

60% 

17% 24% 23% 

40% 

67% 

83% 76% 77% 

20% 

0% 

FY07 FY08 FY09 FY10 

Export Domestic 



Process 

Process 

Process 

Raw Steel 

Steel Slab 

(API Grade) 

Steel Plates/ 

Coils (API Grade) 

Pipes 

(API Grade for O&G) 

Selling Price (1) : 



$ 700-800 /ton. 

$ 900-1,000 /ton. 

$ 1,300-1,400/ton. 

Welpsun’s Value Chain (from Slabs to Pipes) 

Backward integration into plates provides critical value advantage 

Opportunity to service the high end steel category which is currently serviced through imports 

Note 

1. Indicative market prices 



Order Book 

Current Order Book – Geographical Distribution by Volume 

• Orders Booked during FY 09 - $ 1.6 bn 

100% 

85% 

• Orders at the beginning of FY 10 - $ 1.6 bn 

‣ Orders Booked during FY 10 - $ 1.3 bn 

‣ Orders executed during FY 10 - $ 1.6 bn 

• Orders at the beginning of FY 11 - $ 1.4 bn 

‣ Orders Booked during FY 11 (YTD) - $ 0.5 bn 

‣ Orders executed during H1 FY 10 - $ 0.9 bn 

80% 

60% 

40% 

20% 

0% 

Export 

15% 

Domestic 

• Current Orders in Hand (650 k Tonnes) - $ 1.0 bn 

• Raw material tied up for all outstanding orders 

• Majority of the shipping finalized 

Some of the Top Clients for Pipes 

Client 

Ruby – El Paso 

Enterprise 

Transcanada Pipe Line Limited 

Gas Authority of India Ltd. 

Indian Oil Corporation of India 

Saudi Aramco 

Country 

USA 

USA 

Canada 

India 

India 

Middle-East 


3. Global Footprint & Pre Approved with Oil & Gas Majors 

Global Market Expansion 

World’s largest diameter steel pipe producers (1) 

2007 output (million tonnes) 

Salzgitter/Europipe* (Germany) 1.3 

Saudi Arabia 

Iraq 

Welspun (India) 1.0 

Canada 

Spain 

Venezuela 

Russia 

JFE (Japan) 0.7 

Sumitomo (Japan) 0.7 

US (Trader Mkt.) 

US (Projects) 

Mexico 

Peru 

Bolivia 

Tunisia 

Algeria 

Libya 

Egypt 

Columbia 

Oman 

Qatar 

Indonesia 

Sudan 

China 

Bangladesh 

Malaysia 

Evraz** (Russia) 0.6 

Nippon Steel (Japan) 0.6 

Riva (Italy) 0.6 

PSL (India) 0.5 

JSW (India) 0.3 

ArcelorMittal (Luxembourg) 0.2 

Year 2000–2001 Year 2001–2002 Year 2002–2003 Year 2003–2004 Year 2004–2005 

Year 2005–2006 Year 2006–2007 Year 2007–2008 Year 2008–2009 

Year 2009– 

2010 

Stupp (US) 0.1 

Tata/Corus (India/UK/Netherlands) 0.1 

Others*** 7.3 

What Sets WCL Apart From Competition 

• Decade Long Experience 

• All Solutions Under One Roof 

• High Capacity Equipment to Meet Future Demand 

• Backward Integration with In-house Plate-cum-Coil-Mill 

Framework Agreements 

• Features 

- Selected few companies considered for supplies that meet stringent process of qualification 

- Typically customers with large requirement over a period of time 

- Flexibility in pricing terms and continuous business 

• Current Framework Agreements 

- Chevron, Saudi Aramco (pipe purchase agreement) 

WCL was rated 2 nd largest Pipe Company in 2007 and has since added further capacity of 0.55 MTPA 

Note 

1. As reported by Financial Times on April 13, 2008 


3. Global Footprint & Pre Approved with Oil & Gas Majors 

AGIP 

BECHTEL 

BRITISH GAS 

BRITISH PETROLEUM 

CHINA NATIONAL PETROLEUM CORPORATION 

CPMEC, CHINA 

CHEVRON (Framework Agreement) 

DOW 

RUBY (ELPASO) 

EGYPTIAN GENERAL PETROLEUM CORPORATION 

ENTERPRISE 

EXXON-MOBIL (GOLDEN PASS PIPELINE) 

GAIL 

GASCO, ABUDHABI 

GASCO, EGYPT 

GAZPROM (STROYTRANSGAZ) 

KINDER MORGAN 

MOGE, MYANMER 

N.A.O.C. - NIGERIA 

NPCC, ABU DHABI 

NTPC 

ONGC 

PETRO CHINA 

PETRONAS, MALAYSIA 

PDO, OMAN 

PGN, INDONESIA 

QATAR PETROLEUM 

RELIANCE INDUSTRIES LIMITED 

SAIPEM, SNAM 

SAUDI ARAMCO (Framework Agreement) 

SHELL 

STOLT OFFSHORE – Acergy 

SONATRACH 

TOTAL 

TECHNIP 

TRANSCANADA (Long Term Contract) 

UNOCAL 

PERU LNG (HUNT OIL) 

VIETSOPETRO 

Accreditation Process 

A significant entry barrier 

Setting up plant 

2 years 

Seeking API 

approval 

1 year 

3 - 5 years 

Approval from 

major domestic 

/ international 

oil and gas 

companies 

2 – 3 years 


4. Strong Management Team with Proven Execution 

Capabilities 

Management Team 

Mr. B.K. Goenka is the Chairman, and the chief architect 

of the Welspun Group. Today, with his entrepreneurial 

ability and professionalism, he has built up one of the most 

admired business conglomerates 

Mr. Asim Chakraborty is Executive Director and Plant Head 

of the Anjar facility. A Civil Engineer from the University of 

Kolkata, Mr. Chakraborty has been instrumental in timely 

construction of various projects 

Mr. R.R. Mandawewala is the Managing Director. He has 

been a key contributor in Welspun’s journey. A Chartered 

Accountant by profession and with over 20 years of 

experience, he has cross-industry expertise varying from 

Textiles to SAW pipes. 

Mr. L. T. Hotwani is Director, Supply Chain Management 

of Welspun Corp Limited. With a rich experience of over 36 

years, Mr. Hotwani is instrumental in sourcing raw materials 

and managing supply chain with global players 

Mr. M.L. Mittal serves as Executive Director. A Chartered 

Accountant by profession, Mr. Mittal has been instrumental 

in arranging Long Term Loans and Working Capital 

Facilities. During his tenure, the Company has successfully 

funded several expansions projects. 

Mr. Lauri Malkki serves as CEO. Mr. Malkki has over 30 

years of experience within the international steel and pipes 

industries. Prior to Welspun, Mr. Malkki was the Managing 

Director, responsible for the global sales, of Europipe GmbH 

in Germany. For more than 20 years he was the head of the 

middle European operations of the Rautaruukki Group, 

Finland. 

Mr. B.R. Jaju serves as Director & CFO. A Chartered 

accountant by profession, member of Company Secretary (FCS), 

as well as a Law Degree (LL.B). He has a rich experience over 

30 years in finance and global M&A activities. Mr. Jaju has been 

awarded 3 times as Best Performing CFO in the year 2003, 2005 

and 2006, by the most credible nationally renowned jury. 

Mr. Prashant Mukherjee serves as Director of Welded 

Pipes. A Graduate in Science (Engineering, Mech) with over 24 

years experience mostly in the Oil & Gas Pipe Industry, Mr. 

Mukherjee has been instrumental in implementing expansion 

projects in the Company 

Mr. Akhil Jindal serves as Director of Corporate Affairs. 

He graduated with an Engineering Degree and thereafter an 

MBA from Indian Institute of Management, Bangalore. Mr. 

Jindal is responsible for strategic inorganic/organic 

initiatives within the Group and has spearheaded large fund 

raisings, cross border acquisitions, private equity raisings 

and financial closure of projects exceeding over US$ 1 

billion 

Mr. Vipul Mathur is the Director of Marketing & Sales 

(Pipes & Plates Division). A Science Graduate and Masters in 

Business Administration (MBA) in Marketing, he has a rich 

experience of over 16 years in the Oil & Gas Pipe Industry 



Capabilities 

LSAW Pipes 

ERW Pipes 

HSAW Pipes 

Coating of Pipes 



Capabilities 

Plates 

Plates 

US Plant 



Capabilities 

US Plant 

• Rationale for US Plant 

– Opportunity to locate closer to customers who were facing supply challenges 

– Transportation cost becomes quite large for inter-continental shipment 

– Existing capacity in the US was not able to serve the requirement of US clients 

• State of the art facility at Little Rock, Arkansas. Commissioned in Feb-09 and has obtained all API 

approvals 

• Key supplier for last 5 years in US with client list that includes Chevron, Exxon Mobil (Golden Pass 

Pipeline), Kinder-Morgan and Ruby (El Paso) 

– Framework agreement with Chevron, making Welspun one of the three global preferred vendor for 

next 3-5 years 

– Supplied pipes for world‟s deepest pipeline in Gulf of Mexico 

• In H1 FY 2011 utilization levels ramp-up to 60% 


5. Exponential Growth in Revenues & Margins 

(„000 MT) (INR MM) 

CAGR (06-10): 22% 

814 

100,000 

850 

695 

641 

75,000 

650 

501 

(#) 476 

450 371 

387 

50,000 

250 

50 

# Plates 

(INR MM) 

12,000 

8,000 

4,000 

0 

US$ MM 

1,655 

CAGR (06-10): 68% 

(INR MM) 

(8) 

13,186 

CAGR (06-10): 78% 

6,000 

3,384 

6,555 6,348 

Notes 

1. Excluding Other Income 

2. Using avg. exchange rate of US$1 = Rs.44.28 from 01-Apr-05 till 31-Mar-06 



7,339 

2005-06 2006-07 2007-08 2008-09 2009-10 H1-2010-11 

(2) 

37 78 

Sales (volume) Consolidated Revenues (1) 

(#) 

154 

(3) (4) (5) 

(7) 

231 

(#) 


EBITDA (1) 

163 138 

(6) 

25,000 

0 


US$ MM 413 (2) 617 (3) 991 

(4) (5) 

1,250 1,637 (7) 

(9) 

951 

4,500 

3,000 

1,500 

0 

18,298 

614 

CAGR (05-10): 42% 

26,834 

1,425 

Profit After Tax 

3,408 

39,945 

2,135 

57,395 

6,104 

73,503 

PAT Margin (%) 

3,685 


(2) 

(3) (4) (5) 

294 163 (9) US$ MM 14 33 85 47 136 (7) 

82 (9) 

42,742 

16.0% 

12.0% 

8.0% 

4.0% 

0.0% 

Notes 


6. Includes extraordinary items : forex provisioning of INR1,256MM, Inventory write-down of INR 385MM, 

ECB provisions of INR 178MM 


8. Includes recovery of past forex provisioning ( in FY09) , which is reflected in better realization and cost of material 

9. Exchange rate of US$1 = Rs.44.935 as at 30-Sept-10 

November 2010 Page 18 

(6)


EPS (Rs./Share)(Diluted) 

35 

28 

CAGR (06-10): 61% 

28.4 

21 

18.3 

16.6 

14 

7 

4.2 

8.7 

11.5 

0 


ROCE and ROE (%) 

25% 

20% 

15% 

14.7% 

12.2% 

17.3% 

21.8% 21.7% 

19.1% 

11.4% 

R OC E 

13.7% 

R OE 

19.5% 

21.0% 

10% 

5% 

0% 

2005-06 2006-07 2007-08 2008-09 2009-10 



Consolidated Balance Sheet (Rs. Mn.) FY2009 FY2010 Change 

Sources of Funds 

Shareholders' Funds 

Share Capital 932 1,022 89 

Reserves and Surplus 14,664 27,990 13,325 

15,597 29,011 13,414 

Minority Interest 0 0 (0) 

Foreign Currency Monetary Item Translation Difference A/c - 75 75 

Loan Funds - 

Secured Loans 26,435 18,654 (7,780) 

Unsecured Loans 103 6,822 6,718 

26,538 25,476 (1,062) 

Deferred Tax Liabilities (Net) 2,488 3,352 865 

Total 44,623 57,915 13,292 



Consolidated Balance Sheet (Rs. Mn.) FY2009 FY2010 Change 

Application Of Funds 

Fixed Assets 

Gross Block 34,844 38,810 3,966 

Less:Depreciation/Amortisation/Impairment 3,847 5,889 2,042 

Net Block 30,996 32,921 1,924 

Capital Work-In-Progress 5,808 5,412 (396) 

36,804 38,333 1,529 

Investments 1,140 1,596 456 

Foreign Currency Monetary Item Translation Difference A/c 355 - (355) 

Current Assets, Loans and Advances - 

Income Accrued on Investments 113 13 (99) 

Inventories 26,113 20,322 (5,791) 

Sundry Debtors 4,601 8,077 3,476 

Cash and Bank Balances 9,470 17,028 7,558 

Loans and Advances 5,552 6,031 479 

45,848 51,471 5,623 

Less : Current Liabilities and Provisions - 

Current Liabilities 38,955 32,291 (6,663) 

Provisions 601 1,219 618 

39,555 33,510 (6,045) 

Net Current Assets 6,293 17,961 11,668 

Preliminary Expenses 0 0 (0) 

Deferred Revenue Expenditure 31 25 (5) 

Total 44,623 57,915 13,292 


H1 & Q2 FY 2010-11 Highlights 

Major Highlights 

• Sales growth of 4% on the back of: 

• Volume growth from US pipe plant 

• Higher plate and coil volumes 

• Lower steel prices lowers the realization. However, 

profitability inches up 

• EBITDA grows by 8%. However, operational EBITDA registers 

a growth of 20% as H1FY10 included realignment gain of Rs 

667.9 mn 

• Interest lower by 57% mainly on account of repayment of high 

cost term loans and higher interest income 

• Depreciation is higher in comparison to corresponding quarter 

on account of capitalization, commissioning of Coil Mill and 

consolidation of subsidiary. 

• Consequently, Profit after Tax at Rs. 3685 mn, reflects growth 

of 33% on YoY basis. 

• EPS grew by 13% despite dilution effect of $ 100 million equity 

raising by QIP (Qualified Institutional Placement) and potential 

dilution impact of $150 mn FCCB (Foreign Currency 

Convertible Bonds) conversion. 

• This quarter has witnessed higher sales volume and higher 

operational EBITDA. Interest cost is lower and depreciation is 

higher in line with H1 FY11 trend. Resultant PAT growth is 8% 

to Rs 1778 mn. 

Summary of H1& Q2 FY11 

Particulars 

Breakdown of Production and Sales in MT 

* Includes internal sales 

Q2 

FY 11 

Q2 

FY 10 

Growth 

H1 

FY 11 

H1 

FY 10 

(Rs. Million) 

Growth 

Sales 18,524 21,734 -15% 42,742 41,133 4% 

Reported EBITDA 3,504 3,703 -5% 7,339 6,775 8% 

Interest 374 610 -39% 592 1,361 -57% 

Depreciation 614 538 14% 1,155 1,030 12% 

PAT 1,778 1,651 8% 3,685 2,770 33% 

EPS (Rs./Share) - Diluted 8.02 8.79 -9% 16.59 14.74 13% 

Reported EBITDA Margin (%) 18.9% 17.0% 17.2% 16.5% 

PAT Margin (%) 9.6% 7.6% 8.6% 6.7% 

Production Volume 

(in MT) Q2 FY11 Q2 FY10 Growth H1 FY11 H1 FY10 Growth FY2010 

Total Pipes 

Consolidated 254,337 210,469 21% 507,827 456,865 11% 813,750 

Plates & Coils 111,546 90,911 23% 228,356 183,163 25% 383,577 

Sales Volume (in MT) Q2 FY11 Q2 FY10 Growth H1 FY11 H1 FY10 Growth FY2010 

Total Pipes 

Consolidated 229,688 209,023 10% 476,251 440,103 8% 815,550 

Plates & Coils* 128,358 113,611 13% 231,427 175,949 32% 387,224 

Status of Projects 

Capacity of Pipes is being increased to 2.2 million MTPA: 

• LSAW expansion of 350 K MTPA at Anjar in Q1 FY 2012. 

• HSAW plant of 100K MTPA at Karnataka is now fully 

operational. 

• After modifications, Saudi plant with capacity of 300K 

MTPA has started trial production and is likely to be on 

stream by the end the of 3rd quarter FY 2011. 

New Initiatives 

• Effective 16th August, 2010, Welspun Infratech Ltd (a 100% subsidiary of Welspun Corp) 

acquired control on MSK Projects India Ltd and now holds 61.12%. 

• With reulatory approval processes in Saudi Arabia underway, the transaction is expected to 

be completed soon. This development will contribute to Welspun’s global reach not just in 

terms of supply, but also for production facilities. 

• Mr David Delie, previously CEO of Berg Steel Pipe Corporation with over 30 years of 

experience in the industry, was appointed as the President of Welspun Tubular LLC. His 

appointment will tie in with the Company’s committment to supply products from multiple 

sources with quality unmatched in the industry 


Consolidated Balance Sheet as on 30 th Sept 2010 

A 

Particulars As at 30.09.2010 

Unaudited 

(Rs. Mn) 

Sources of Funds 

1 Shareholders Fund 

a Share Capital 10,22.8 

b Reserves and Surplus 31,469.9 

c Share Application Money - 

d Minority Interest 15,48.4 

2 Loan Funds 38,913.5 

3 Foreign Currency Monetory Item Translation Difference Account 37.7 

4 Deferred Tax Liabilities-Net 3,761.2 

B 

Total 76,753.5 

Application of Funds 

1 Fixed Assets 40,295.9 

2 Build Operate and Transfer Projects Expenditure 4,158.5 

3 Investments 13,065.0 

4 Foreign Currency Monetory Item Translation Difference Account 

5 Current Assets, Loans and Advances 

Less 

a Inventories 19,002.2 

b Sundry Debtors 12,997.8 

c Cash and Bank Balances 13,131.6 

d Loans and Advances 4,964.4 

4 Current Liabilities and Provisions 

5 

a Current Liabilities 29,404.4 

b Provisions 1,482.3 

Miscellaneous Expenditure 24.8 

Total 76,753.5 


Summary 

1 Strong Industry 

Fundamentals 

• Capital intensive, high 

barriers to entry 

• North America expected to 

lead demand 

5 

Exponential Growth in 

Revenues & Margins 

• Revenues have grown at a 

CAGR of 42% over the last 

five years 

• PAT has grown at a CAGR of 

78% in the same period 

2 

Robust Business 

Fundamentals 

& Healthy Order Book 

• Strong volume growth 

• Order Book in excess of US$ 

1.0 Bn 

• Capacities of global size 

• Comprehensive product mix 

4 3 Global Footprint & Pre 

Strong Management Team 

with Proven Execution 

Capabilities 

• Recognized by the FT as the 

second largest steel pipe 

producer in the world in 2007 

• First Indian company to supply 

pipes for offshore projects in US 

Approved with O&G Majors 

• Presence across more than 25 

countries 

• Pre-approved with more than 

50 O&G Majors 


Welspun on the Path of Global Leadership 

Scale Leadership 

Scale of operations through large economic plants across the globe 

Cost Leadership 

Produce world class products at the least cost and maintain competitive edge 

Technology 

Leadership 

Adopt and innovate cutting-edge technology to satisfy stringent 

requirements of customers 

Quality Leadership 

Consistent focus on quality at all levels; be the best in delighting customers 

Process Leadership 

Most efficient and effective processes to achieve optimal utilizations 

People Leadership 

Best in class people : Produce extraordinary results 

Global Leadership Serve Globally, Act Locally 


Key questions on recent updates 

What is Welspun's exposure to current civil proceedings? 

During the previous year one of the customer reported defect in the pipes supplied 

alleging grade of steel used did not meet the specifications, the company replaced the 

defective pipes and also provided for the expected loss on this account. During the year 

the said customer initiated legal action against the company in the United States of 

America claiming loss / damages of $ 66 million on account of defects in the pipes 

supplied, consequently the company also initiated legal action against the steel supplier 

claiming corresponding loss / damages it may suffer on account of this claim of the 

customer. Hence the company does not expect any liability on account of the claim 

against it. 


Thank You 

For further details, please contact: 

Akhil Jindal 

Director - Corporate Affairs 

Tel.: +91- 22- 6613 5721 

Mob.: +91- 98- 7029 6187 

Email: akhil_jindal@welspun.com 

Navin Agarwal 

AVP - Corporate Affairs 

Tel.: +91- 22- 6613 5734 

Mob.: +91- 98- 7000 9224 

Email: navin_agarwal@welspun.com 

Company Website: http://www.welspuncorp.com

November 2010 - Welspun

Create successful ePaper yourself

Delete template?

Save as template?