Welspun Corp Shares Experience Significant Rally
Welspun Corp Ltd. shares have demonstrated a remarkable surge, climbing 28 percent over six consecutive trading sessions. The rally culminated on Monday, pushing the stock past the Rs 2,363 per share target price previously set by Systematix Research. This impressive performance is largely attributed to a substantial new order from the United States, which has significantly bolstered the company's financial outlook.
Brokerages Revise Targets Amid Strong Order Book
Following the sustained upward momentum, various brokerage firms have begun to reassess their price targets for Welspun Corp. While Systematix Research maintained a 'Hold' rating on the stock, it had factored in the company's largest-ever single order. Nuvama, another prominent brokerage, has a revised target price of Rs 2,437, which the stock was nearing.
Other analysts have expressed even greater confidence. Investec has reiterated a 'Buy' rating with a more ambitious target of Rs 2,878, while Equirus Securities has set the highest target at Rs 3,107, reflecting strong optimism regarding Welspun Corp's future prospects.
Landmark US Order Drives Growth
At the heart of the recent rally is a colossal $1.8 billion order from the United States. This contract involves the supply of pipes crucial for the evacuation and transportation of over 3 billion cubic feet of gas daily from the Permian Basin to the Gulf Coast. This landmark deal has dramatically transformed Welspun Corp's financial visibility.
According to Systematix, the order has expanded Welspun Corp's overall order book from Rs 25,750 crore to an impressive Rs 42,100 crore. This substantial increase provides enhanced revenue visibility for the fiscal years 2028 and 2029, securing a robust pipeline of work for the company.
Enhanced Financial Projections
The strengthened order book has led to upward revisions in financial estimates. Systematix has raised its EBITDA estimates for FY27 and FY28 by 10-11 percent and its Profit After Tax (PAT) estimates by 8-10 percent, while also introducing positive estimates for FY29. The brokerage projects a Compound Annual Growth Rate (CAGR) of 26 percent for revenue, 28 percent for EBITDA, and 29 percent for PAT over FY26-FY29E.
Equirus Securities highlighted that the US order provides substantial multi-year revenue visibility. While specific EBITDA per tonne guidance for this long-term order was not provided, management indicated that US operating margins typically remain attractive. The company's management has also suggested a directional move towards approximately Rs 50 billion in EBITDA over the next three to four years, supported by strong US demand and timely capacity expansion.
Global Demand Fuels Optimism
The company's medium-term outlook is further supported by its record order book, with 60-65 percent concentrated in the US market, and execution visibility extending through FY29. The US business is expected to remain a primary earnings driver, benefiting from ongoing capacity expansion and sustained demand for energy infrastructure.
Beyond the US, Welspun Corp sees significant potential in the Middle East. With nearly 20 percent of LNG supply disrupted in the region, the company anticipates higher pipe demand as restoration efforts unfold over the next three to five years. Discussions are also underway for the expansion of Saudi pipelines and water networks, potentially translating into new orders in H2FY27. In India, the expansion of LNG terminals and the City Gas Distribution (CGD) network are expected to drive elevated demand for line pipes.
Management Confident in Future Growth
Welspun Corp's management continues to project an EBITDA of INR28 billion in FY27E and believes that doubling EBITDA by FY30 is achievable if all geographical markets perform strongly. The recent rally in the stock price underscores market confidence, driven by stronger order inflows, improved execution visibility, and robust demand across its key markets in the US, Middle East, and India.