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Topic: Welspun Gujrat

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kulman Senior Member Joined: 02/Sep/2006 Location: India Online Status: Offline Posts: 9319	Posted: 31/Jul/2007 at 7:22pm
	This is from Welspun's competitor, Jindal Saw: Jindal Saw Ltd has announced that following Outlook: The developed world's increasing requirements for energy, and the emergence of the industrial powerhouses in developing countries, is the major catalyst of the growth in the OCTG and line-pipe markets. The boom in Oil and Gas exploration and production over the last few years has lead to a surge in demand for tubular products. The expectation of a long-term bull market in Oil and Gas prices has resulted in an extended upturn in demand for tubular products as exploration expenditure grows and the search for Oil and Gas pushes against new geological and technical boundaries. The rapid economic growth in India faces an urgent need to develop and improve water supply and sewerage systems, more prominently in urban areas. Demand for ductile iron pipes, which is main product of pipeline for water supply, is increasing rapidly and Government budget for development of water supply systems is also increasing. Accordingly, the Company expect a significant growth in the Ductile Iron Pipe demand. The Company has experienced a steady growth in all the business segments and expects to have improved performance in all the segments including large diameter Saw Pipes, Ductile Iron Pipes and Seamless tubes. The Company projects better and sustainable productivity and profitability supported by its sustained healthy order book.
	Life can only be understood backwards—but it must be lived forwards
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deveshkayal Senior Member Joined: 04/Sep/2006 Online Status: Offline Posts: 3903	Posted: 06/Dec/2007 at 5:43pm
	Deserves more coverage on TED and I will make sure it does !!
	"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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deveshkayal Senior Member Joined: 04/Sep/2006 Online Status: Offline Posts: 3903	Posted: 06/Dec/2007 at 9:10am
	Ranked amongst ‘India’s top 100 Corporates 2007’ by S&P. Fastest Growing Co by Business Today, India. Approved by more than 45 Oil & Gas Giants across the globe. Sales realization grown by 28% YOY & 4.4% QTQ while RM cost grown by 17%YOY & 3% QTQ. So raw material costs did not affect Welspun Gujarat's financials. Sales almost doubled, EBITDA 2.30 times & PAT more than tripled in the last 6 quarters. Diluted EPS growth 127% in H1FY08 Operating margin 16.73% . Debt/Equity ratio: 0.95 Thrust on high realisation niche export market. Exports constituted 85% of total sales. Efforts have been to be present in all potential markets but selective for booking order in high realisation markets. Raw Material Tied up - required for rest of the period. Majority of the shipping finalised. Domestic market potential of over $5bn. New projects – pipelines covering hook and nook of US, multiple project announced, long term sustainable demand. Market opportunity of over $ 7 bn. WELSPUN WOULD BE 1.75 MTPA BY MARCH 2009, MAKING IT ONE OF THE TOP 3 PIPE COMPANY IN THE WORLD. Leading private equity player 3i Group bought 6.6% stake for $80mn saying it has one of the best management. One of the 20 companies to watch out for in 2008 by Business Today. Its order book, currently at Rs 5,500 crore, could vault to Rs 10,000 crore in 2008-09. With domestic oil and gas product rising courtesy Reliance, we expect our India revenues to double to 30 per cent of sales next year,” says Goenka. ------------------------------------------------------ I am thinking of taking some exposure to this stock. Everything is just great. 4 bagger in 3 years.
	"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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deveshkayal Senior Member Joined: 04/Sep/2006 Online Status: Offline Posts: 3903	Posted: 07/Dec/2007 at 6:35pm
	Generally, What is the P/E given to Pipe manufacturers ??? Since, we have a growth visibility here and growing at over 50% CAGR, dont you think they merit a PE of 20...
	"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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smartcat Senior Member Joined: 29/Mar/2007 Location: India Online Status: Offline Posts: 4243	Posted: 07/Dec/2007 at 6:50pm
	Actually, P/Es for pipe manufacturers vary a lot. Welspun Guj: 31 PSL: 30 Maharashtra Seam: 18 Jindal Saw: 14 Ratnamani: 12 Man Ind: 11 I guess the P/E valuation of a company that Mr. Market assigns depends on size, profit margins, product mix etc. If the demand sustains for a few more years, we could see higher average P/Es But remember that steel companies trade at a P/E of 10 - 12. Since pipeline companies go higher up the value chain that commodity plays like steel, a P/E of 18 - 20 does not seem to be out of sync.
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jack Newbie Joined: 28/Nov/2006 Location: Bahrain Online Status: Offline Posts: 25	Posted: 07/Dec/2007 at 7:45pm
	Ratnamani seems to be the good bet, but the stock has run up recently.
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kulman Senior Member Joined: 02/Sep/2006 Location: India Online Status: Offline Posts: 9319	Posted: 07/Dec/2007 at 8:38pm
	Here's an excerpt from Biz Today article... Welspun Gujarat Stahl Rohren It’s already among the top three (oil and gas) pipe manufacturers in the world and has 60 oil companies as its clients. Over the last three years, its profits have clocked a near or more than 100 per cent growth— Revenues too, have spiralled by 158 per cent over the 2004-05 levels to touch Rs 2,678.5 crore in 2006-07. The company, which derives 85 per cent of its revenues from exports, will be commissioning its coilcum-plate plant at Kandla in Gujarat early next year, followed by the soft launch of its $100-million plant in Little Rock, Arkansas, in February. Its order book, currently at Rs 5,500 crore, could vault to Rs 10,000 crore in 2008-09. “With domestic oil and gas product rising courtesy Reliance, we expect our India revenues to double to 30 per cent of sales next year,” says Goenka. Source: http://businesstoday.digitaltoday.in/profiting-from-pain-points-41.html For the Pipelines sector, there's a separate thread on TED here.
	Life can only be understood backwards—but it must be lived forwards
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smartcat Senior Member Joined: 29/Mar/2007 Location: India Online Status: Offline Posts: 4243	Posted: 07/Dec/2007 at 9:59pm
	If you look at Ratnamani's 3 year graph, it looks like the stock has almost never had a down day - very steady upmove. So inspite of low P/E, the high earnings growth has resulted in above-market returns. Of course, if there is the much-loved P/E re-rating in stocks like these, the stock price will triple suddenly. Even if there is no re-rating, the stock price would follow the earnings growth.
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