Welspun Corp posts sharp Q1 profit jump after Rs 724 crore Saudi stake sale

Mumbai: Welspun Corp Limited reported a sharp jump in first-quarter earnings, driven by the sale of its stake in a Saudi pipe manufacturer, while simultaneously strengthening its energy portfolio through a majority acquisition of its captive power business.

At a board meeting held on Friday, the company approved its financial results for the quarter ended June 30, 2026, along with the acquisition of an additional 51 per cent stake in Welspun Captive Power Generation Limited from promoter group company Welspun Living Limited.

The all-cash transaction, valued at Rs 67.66 crore, involves the purchase of 1.51 crore equity shares. Once completed, subject to regulatory approvals expected by August 31, 2026, Welspun Corp’s combined holding in the captive power company will increase from 23 per cent to 74 per cent, making it a subsidiary.

The board also approved an investment of Rs 26,000 to acquire a 26 per cent stake in a new company to be incorporated in India.

The company’s earnings received a significant boost from the sale of shares in Saudi-listed East Pipes Integrated Company for Industry through its wholly owned subsidiary, Welspun Mauritius Holdings Limited.

Welspun sold 14.17 lakh shares in East Pipes through negotiated deals on the Tadawul Stock Exchange, generating proceeds of SAR 283.46 million, equivalent to around USD 75.6 million or Rs 723.55 crore. The transaction resulted in a pre-tax gain of Rs 547.93 crore.

Helped by this one-time gain, consolidated profit before tax more than doubled to Rs 1,207.13 crore, compared with Rs 504.01 crore in the previous quarter and Rs 461.05 crore in the corresponding quarter last year.

After a tax expense of Rs 159.25 crore, consolidated net profit stood at Rs 1,047.88 crore, while profit attributable to shareholders came in at Rs 1,046.49 crore.

Basic earnings per share rose sharply to Rs 39.68, up from Rs 14.04 in the March quarter and Rs 13.32 a year earlier.

Revenue from operations for the quarter was Rs 4,081.12 crore, while total income, including other income, reached Rs 4,144.91 crore.

On the cost front, total expenses declined to Rs 3,558.54 crore. Raw material costs accounted for Rs 2,331.94 crore, employee benefit expenses stood at Rs 313.63 crore, depreciation totalled Rs 124.58 crore, finance costs came in at Rs 45.18 crore, and other operating expenses were Rs 744.21 crore.

The steel products business remained the company’s primary growth engine, contributing Rs 3,906.07 crore in revenue and Rs 598.81 crore in segment profit. The ‘Others’ segment, comprising businesses such as Sintex-BAPL and Weetek, generated Rs 175.05 crore in revenue but reported a Rs 37.06 crore segment loss.

Operational performance also improved. The operating EBITDA margin expanded to 19.73 per cent, compared with 14.57 per cent in the previous quarter, while the net profit margin climbed to 25.68 per cent.

The balance sheet continued to strengthen, with the debt-to-equity ratio improving to 0.11, the interest coverage ratio rising to 69.58, and net worth crossing Rs 10,449.45 crore.

With a stronger balance sheet, improving profitability and greater control over its power assets, Welspun Corp is positioning itself to improve operational efficiency while continuing to benefit from demand across domestic and international steel markets.