The Hindu Business Line : Order inflows remain firm for Welspun Guj

Steel pipe major, Welspun Gujarat Stahl Rohren has bagged orders worth Rs 500 crore recently. The company’s order book now stands at about Rs 9,500 crore, which is about 2.4 times its FY08 revenues. This holds considerable merit on many counts. For one, it reflects favourably on the company’s execution capabilities as the orders have been procured at a time when most global economies are grappling with slowdown or worse still, recession. Two, the continuing order inflows to some extent reduces concerns that most global energy majors, who are the major users of steel pipes, may scale down their capex driven by cooling oil price.

While the rapidly cooling crude prices may affect incremental or fresh capex by these companies, the demand for pipes is likely to remain strong in the near-term as spends on pipelines happen only in the last leg of the entire capex. That said, while details of the order break up, in terms domestic and export orders were not available, the company is likely to enjoy only modest margins on these orders.

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