Welspun Corp profit drops 46.87% as other income fades
Revenue rose 9.87% YoY, but costs grew faster and the tax rate increased 8.05 percentage points; operating margin remained below the 71-peer sector median.
Filed 21 May 2026, 18:13 IST · after market close · Welspun Corp Ltd (WELCORP)
Key takeaways
- Consolidated net profit fell 46.87% YoY as other income declined 75.04% and represented 28.21% of pre-tax profit.
- Revenue grew 9.87% YoY, but expenses grew 9.93%, leaving operating margin almost flat YoY and down 1.90 percentage points sequentially.
- The stock fell 3.96% after the results, close to its 4.28% median move after the past eight result announcements.
Price around the results
Operating profit held up, but reported profit quality weakened
Welspun Corp reported consolidated revenue growth of 9.87% YoY and operating profit growth of 9.48%, but net profit dropped 46.87%. The main drag was other income, which fell 75.04% YoY and accounted for 28.21% of pre-tax profit in the quarter. The tax rate also rose 8.05 percentage points to 26.30%, partly widening the gap between operating and net profit performance.
Sequential margin loss followed a sharper fall in revenue
Quarter on quarter, revenue fell 4.85% while expenses declined only 2.76%, so operating margin narrowed 1.90 percentage points. Interest expense fell 3.38% and depreciation increased 0.53%, offering limited offset to the weaker operating conversion. At 11.68%, the margin was 3.98 percentage points below the 15.66% median for 71 Industrials peers that had reported the same quarter.
Q4 ended below the FY26 margin peak
Operating margin had reached 14.78% in Q1FY26, eased to 13.52% in Q2FY26 and edged up to 13.58% in Q3FY26 before falling to 11.68% in Q4FY26. This is not a third consecutive quarterly decline, but the quarter ended well below the year's earlier levels. The YoY margin change was limited to a decline of 0.04 percentage points because revenue and expenses grew at nearly the same pace.
Management points to expansion, order visibility and execution risks
Management said FY27 revenue guidance is Rs 20,000 cr and EBITDA guidance is Rs 2,850 cr, while its consolidated order book stood at about Rs 25,350 cr and the USA spiral mill was booked through FY28. The company said US and KSA capacity expansion projects, including a greenfield ductile iron plant in KSA, are expected to be commissioned in FY27. Management also flagged overcapacity and fund allocation concerns in ductile iron pipes, while describing global stainless steel demand as slow after US tariff actions.
Initial stock reaction was within its usual result-day range
The stock declined 3.96% on the first session after the results, including a 3.63% opening gap, with trading volume at 2.46 times the reference level. That reaction was close to the 4.28% median absolute move across the past eight result announcements, when the stock rose four times and fell four times. The move also overlapped with a corporate action, which limits a clean attribution to the results alone.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,313 cr | ₹4,532 cr | -4.85% | +9.87% |
| Other income | ₹142 cr | ₹120 cr | +18.07% | -75.04% |
| Expenses | ₹3,809 cr | ₹3,917 cr | -2.76% | +9.93% |
| Operating profit | ₹504 cr | ₹616 cr | -18.18% | +9.48% |
| Operating margin (%) | 11.68% | 13.58% | — | — |
| Interest | ₹49 cr | ₹51 cr | -3.38% | -44.08% |
| Depreciation | ₹93 cr | ₹93 cr | +0.53% | +6.94% |
| Profit before tax | ₹504 cr | ₹593 cr | -15.00% | -41.07% |
| Tax | ₹133 cr | ₹137 cr | -2.96% | -15.05% |
| Net profit | ₹371 cr | ₹456 cr | -18.60% | -46.87% |
| EPS (₹) | ₹14.04 | ₹17.17 | -18.23% | -47.28% |
Operating margin of 11.68% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.96% | -4.23% |
| Next session | -2.45% | — |
| 5 sessions | +3.56% | +4.71% |
| 15 sessions | +3.72% | — |
| 30 sessions | +15.85% | — |
Volume on the results session was 2.46× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Sintex launched the Eterno 50-year warranty tank during the quarter.
- Sintex undertook significant price increases during the quarter.
Guidance & outlook
- FY27 revenue guidance is Rs. 20,000 crore and EBITDA guidance is Rs. 2,850 crore.
- The company targets ROCE above 20% and net debt-to-EBITDA below 1.
- The company expects strong multi-year USA demand visibility from LNG, AI data-centre power and oil pipelines.
- Amrut 2.0 funds have started flowing through state governments and demand is likely to surge from Q2FY27.
Expansion
- The company expects its capacity expansion projects in the US and KSA to be commissioned in FY27.
- The company's greenfield ductile iron plant in KSA is scheduled for commissioning in FY27.
New orders
- The global consolidated order book stands at approximately Rs. 25,350 crore.
- The USA spiral mill is booked through FY28.
New products
- Sintex launched the Eterno tank with a 50-year warranty and Active Silver hygiene protection.
New initiatives
- Sintex launched Eterno, a tank with an industry-first 50-year warranty, to reinforce its premium positioning.
- Sintex is investing in automation and AI to improve sales productivity, execution efficiency and organisational effectiveness.
- Sintex launched its pipes business across 10 states with on-ground activation initiatives.
- The stainless steel business received new accreditations for critical grades used in nuclear power, aerospace and boiler tubes.
Problems & risks
- The ductile iron pipes business identifies overcapacity and fund allocation as continuing concerns.
- Global markets for stainless steel bars, pipes and tubes remain slow, with tepid demand after US tariff actions.
- Tariff negotiations continue amid global supply-chain uncertainty.
- Sintex undertook significant price increases due to rising raw-material costs and geopolitical uncertainty.
- OPVC pipe demand is expected to start once JJM funds are fully available.
What to watch
- Whether operating margin moves back above 11.68% after the Q4FY26 decline.
- Whether the 28.21% other-income share of pre-tax profit falls further or remains material.
- Progress against the reported Rs 25,350 cr consolidated order book and the FY27 US and KSA capacity schedule.