Welspun Enterprises Ltd Management Discussions.

Sandeep garg

MD & CEO, Welspun Enterprises Ltd.

The Management Discussion and Analysis (MD&A) should be read in conjunction with the Audited Financial Statements of Welspun Enterprises Ltd ("Welspun" or "WEL" or the "Company"), and the notes thereto for the year ended 31st March 2021. This MD&A covers Welspun’s financial position and operations for the year ended

31st March 2021. Amounts are stated in Indian Rupees unless otherwise indicated. The numbers for the year ending 31st March 2021 as well as for the previous year are regrouped and reclassified wherever necessary.

Forward-Looking StatementS

This report contains forward-looking statements, which may be identified by their use of words like

‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company’s strategy for growth, project development, market position, expenditures, and financial are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events. maCro-eConomiC oVerView

2020 saw unprecedented disruption across economies in the world. India as a nation waded through many challenges and with these challenges emerged many new norms for adaptability. In the first half of the year, the impact of the pandemic and the consequent lockdown was felt strongly. Sudden closure of factories led to never seen before supply chain disruptions along with almost negligible demand in sectors such as automobile,results, travel and tourism etc. causing a double whammy. Post opening up of the economy, the rebound has also been as sturdy. Easing of movement restrictions, pent-up and festive demand, and the revival of several infrastructure projects by the Government helped the manufacturing and construction sectors to bounce back relatively strongly. The massive inoculation drive has seen uptick in consumer sentiment.

The Indian economy slowed down with GDP contraction moderating to 7.7% in FY 2020-21 as compared to 4.2% growth in FY 2019-20. The expansion of services activity since the beginning of 2021 is particularly noteworthy as people overcoming the fear of the pandemic have shown preference for enhanced mobility, albeit at the risk of increasing the infection rate. The pick-up in construction activity, with its wide array of backward and forward linkages, is slowly developing into a critical growth lever of the economy. To help nurture this recovery, systemic liquidity continues to be in surplus mode. A major downside risk to growth continues to be the pandemic induced morbidity and fatality that has elevated health stimulus as a key macroeconomic lever for India’s continued economic recovery. Rapid production and deployment of COVID-19 vaccination will be critical to taking forward the health stimulus deep into FY 2021-22 and India is well in position to do so having become the largest producer of vaccine in the world and currently ranked third behind the US and China in administering vaccine doses.

The budget allocation focuses on strengthening holistic health covering prevention, cure and well-being as articulated under the newly-launched Atmanirbhar Swasth Bharat Yojana. Ongoing health care programs including Pradhan Mantri Jan Arogya Yojana and Ayushman Bharat Programme are also being strengthened. The renewed focus on Jal Jeevan Mission, the second phase of Swachh Bharat Abhiyan (Urban) and the Clean Air Initiative along Poshan Abhiyan further define edge of comprehensive health care project that has taken off in India.

World trade recovered in the second half of 2020 largely driven by rebound in trade of goods. Trade in services, however, continues to lag substantially below averages. According to IMF, although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook. Amid exceptional uncertainty, the global economy is projected to grow 5.5% in and 4.2% in India is expected to post a sharp turnaround and resume its pre-COVID pre-slowdown trajectory by growing at 11.5% in FY 2021-22 and 6.8% in FY 2022-23.

Source: Department of Economic Affairs, IMF, National

Statistics Office


Ministry of Finance includes power, urban services, telecommunications, roads, ports, civil aviation, and railways under infrastructure sector. Along with this in its latest NIP initiative, it has added irrigation, rural infrastructure, and social infrastructure as well in the purview of infrastructure.

In an effort to improve the country’s infrastructure, the Union Finance Minister, during the year, unveiled the National Infrastructure Pipeline (NIP). This program envisages implementation of Rs. 111 trillion of infrastructure projects up to FY 2024-25 as part of the Government’s spending push in the infrastructure sector. It is estimated that India would need to spend USD 4.5 trillion on infrastructure by 2040 to sustain its growth rate, making it the second largest infrastructure market in Asia after China.

At the start of the financial year, projects worth

Rs. 44 trillion out of the Rs. 111 trillion, accounting for 40% are under implementation and worth Rs. 22 trillion projects that account for NIP’s 20% are under development stages.

Sector-wise breakup of Capital expenditure of Rs. 111 lakh crore up to FY 2024-25

Also, as per the recent Budget, Capital expenditure for FY 2021-22 for Infrastructure is pegged at about Rs. 5.5 trillion (26% above FY 2020-21 Revised Estimate of Rs. 4.39 trillion), with additional Rs. 2 trillion to be provided to states and autonomous bodies for their capex. The increased budgetary allocation and planned capital outlay by the Central government will help increase the pace of infrastructure investment.

Union Budget 2021 chalks out Capital outlay of Rs. 5.5 trillion (up 24.5% YoY) road inFraStrUCtUre

India has the second largest road network in the world, spanning over a total of 6.21 million kilometers (kms). At present 85% of transit is through the roads. The total road network comprises of 2% National Highways (NHs) / Expressways, 3% of State Highways and 95% district and village roads. Due to the continuous efforts by the Ministry of Road Transport and Highways (MoRTH), National Highways (NHs) length has increased from 91,287 km in April 2014 to about 137,625 kms as on 20th March, 2021. However, India scores only a moderate 76% on the World Economic Forum’s Road Connectivity Index that measures the average speed and straightness of roads connecting the country’s 15 major cities. There is also a need to improve the quality of rural and border roads and make them all-weather to boost connectivity and economic activity in remote areas.

FY 2020-21 focused on both – awarding as well as implementation of projects. The Ministry of Road Transport & Highways took a decision to complete all ongoing projects that had been awarded up to FY 2015-16, and placed the highest ever target of construction of about 11,000 kms of National Highways asagainst10,237kmsachievedduringFY2019-20.Bythe end of the financial year, highway construction in the country reached an all-time high with 13,394 kms length of highways constructed across the country. With these figures, the pace of construction touched 37 km per day. NHAI has completed construction of 4,192 km in FY 2020-21 as against 3,979 km of national highways constructed in FY 2019-20.

Overall road projects exceeding 55,000 km in length, costing more than Rs. 6.26 lakh crore, are in progress. A total of 1,330 kms of highway projects were awarded in the first half of FY 2020-21. However, the pace gathered in the second half, and construction contracts of 10,467 km of highway projects were awarded in FY 2020-21 as against 8,948 km in the FY 2019-20. This created a robust pipeline for future construction. NHAI has a target to build 60,000 km of highways in the next five years, including 2,500 km of express highways. These include 9,000 km of economic corridors and 2,000 km each of strategic border roads and coastal roads. Despite the pandemic still ravaging the nation and its economy, the National Highways Authority of India (NHAI) has set an ambitious target to build new highways with a combined length of 4,600 km in the current fiscal year. The Ministry of Road Transport &

Highways (MoRTH) now aims to increase the pace of construction of highways from 37 km per day at present to 40 km per day.

Source: Report of the Task Force National Infrastructure Pipeline-Volume 3, Total capital outlay includes projects for which yearwise phasing is not provided

Along with the Rs. 20 trillion opportunity under NIP over FY 2019-20 to FY 2024-25 for the road sector, Budget 2021 increased allocations by 18% to MoRTH at Rs. 1.18 trillion.

Budget allocation to mortH raised by ~18% Cagr over FY 2017-18 to FY 2021-22e

As per the Hon’ble Union Road Transport and Highways Minister, the Government has lined up opportunities worth Rs. 50,000 crore for the highway construction sector in FY 2021-22. A host of offerings, including build operate and transfer, BOT (toll), toll operate and transfer (ToT) and securitization, among others are in the pipeline. Going forward, National Highways Authority of India (NHAI) will bid out projects worth Rs. 30,000 crore on build, operate, and transfer BOT (Toll) model and hybrid annuity model in FY 2021-22. HAM share of awards is expected to continue to remain in the range of 25-35% of order books given relatively lesser competition.

In spite of the progress made in the last few years, there still remain many obstacles to increasing private participation in road infrastructure. Due to this, some policy changes have been implemented recently in order to benefit the developers.

Given that 100% transfer of equity stake is now permitted six months from COD as well for the new HAM projects, it would bode well for the developers as they would be able to focus on value unlocking much earlier. Due to such Government push and attractive fundamentals, infrastructure sector is witnessing renewed interest from Institutional investors (DIIs & FIIs). Along with rising investment in listed securities, large institutions (particularly foreign players like Blackstone & Cube Highways) are showing strong inclination towards investment in operational road assets. Steadily rising traffic growth,

AAA rated portfolio of assets and attractive IRRs lure these foreign players to own these assets.

water inFraStrUCtUre

India’s 1.3 billion people have access to only about 4% of the world’s water resources, and farmers consume almost 90% of the groundwater water available. As global temperatures rise and overuse of water depletes existing resources, the threat to lives and businessesinAsia’sthird-largesteconomyisprojected to grow. The 2018 Composite Water Management Index (CWMI) noted that 6% of economic GDP will be lost by FY 2049-50, while water demand will exceed the available supply by FY 2029-30. Over 75% of households do not have clean drinking water, while 40% of the population will have no access to drinking water by 2030. While the situation has improved in the past couple of years, there is still a lot to be done.

Due to this, the Union Government has decided to focus on water, sanitation and hygiene services (WASH) in the Union Budget 2021-22. Water infra is the biggest beneficiary with budget allocation of

Rs. 690 billion to Ministry of Jal Shakti.

Huge budget allocation to Ministry of Jal Shakti for FY 2021-22: up 1.9x

Budgetary allocation to ministry of Jal Shakti

Top priority has been given to Jal Jeevan Mission such that allocation has been increased from

Rs. 11,500 crore in FY 2020-21 to Rs. 50,011 crore in FY 2021-22. With matching increase in State share and earmarking of 60% of 15th Finance Commission grants to rural local bodies or PRIs for water supply

& sanitation, the investment on making provision of drinking water in rural areas will be more than Rs. 1 lakh crore in FY 2021-22, which is going to further increase in next three years. So far, about Rs. 20,000 crore have been spent annually on water supply projects. As planned, under Jal Jeevan Mission, about 12.50 crore households are to be provided tap water connections by FY 2023-24, which means every year more than 3 crore households will be provided tap water connections. Also under Jal Jeevan Mission

(Urban), in next five years, 2.86 crore households in

4,378 urban bodies will have tap connections and the scheme will cost Rs. 2.87 lakh crore.

Out of Rs. 894,473 crore worth of capital outlay allocated to the irrigation sector in NIP, total capital expenditure of Rs. 771,695 crore is estimated to be incurred during FY 2019-20 to FY 2024-25 to improve theperformanceofirrigationsystems.Severalprojects are being undertaken, which include large-scale canal irrigation systems to ensure reliable supply of water in water-deficient areas. Many projects involve construction of barrage and reservoirs and large lift irrigation projects. Apart from irrigation projects, river interlinking projects are planned by the Government in order to control droughts in areas facing water shortage and floods in water excess regions. The idea is to reduce dependence of farmers on uncertain monsoon rains. The projects would be commissioned by the National Water Development Agency and an estimated capital expenditure of Rs. 102,665 crore would be incurred during FY 2019-20 to FY 2024-25.

Many sewage treatment plants (STPs) and effluent treatment plants (ETPs) are being commissioned under this program. Overall, an estimated capital expenditure of Rs. 20,100 crore would be incurred during FY 2019-20 to FY 2024-25 for building robust infrastructure to ensure that menace of river water pollution is minimized to the extent possible.

Irrigation NIP -Capital outlay over FY 2019-20 to FY 2024-25 (Rs. crore)

Source: Report of the Task Force National Infrastructure Pipeline-Volume 3, Total capital outlay includes projects for which year wise phasing is not provided.

oiL and gaS

Oil and gas sector is among the eight core industries in India and plays a major role in influencing decision-making for all the other important sections of the economy. India’s economic growth is closely related to its energy demand, therefore, the need for oil and gas is projected to grow more, thereby making the sector quite conducive for investment. The Government has adopted several policies to fulfill the increasing demand. It has allowed 100%

Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products and refineries among others. Today, it attracts both domestic and foreign investment as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.

India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally. Crude Oil import rose sharply to USD 101.4 billion in FY 2019-20 from USD 70.72 billion in FY 2016-17. India retained its spot as the third largest consumer of oil in the world in CY 2019 with consumption of 5.16 million barrels per day (mbpd) of oil as compared to 4.56 mbpd in CY 2016.

According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), the petroleum and natural gas sector attracted FDI worth USD 7.86 billion between April 2000 and September 2020.

The Government of India undertook several initiatives to promote oil and gas sector during the financial year. In November 2020, oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) simplified the country’s gas pipeline tariff structure to make fuel more affordable for distant users and attract investment for building gas infrastructure. In November 2020, the Indian Government urged OPEC to remove pricing anomalies for different regions with a view to aid the Corona-battered global oil industry get back to normalcy. The Government is planning to invest USD 2.86 billion in the upstream oil and gas production to double natural gas production to 60 bcm and drill more than 120 exploration wells by CY 2022.

Plans to monetize oil & gas pipeline of GAIL, IOCL and HPCL via InvIT and set up an independent transport system operator (TSO) to manage common carrier pipeline network have also been announced in the Union Budget 2021-22.

weL - BUSineSS StrategY and HigHLigHtS

Welspun Enterprise Limited (WEL, the Company) is one of the three key companies under the Welspun Group. The Company operates in the infrastructure sector (road and water infrastructure) with investment in oil and gas space. WEL is unique in the Indian infrastructure space with a significant cash balance and a differentiated asset-light model. As on 31st March 2021, the Company has invested (incl. Loan) Rs. 1,030 crore in HAM Road portfolio,

Rs. 444 crore in Road BOT project, Rs. 93 crore in Water BOT project, Rs. 320 crore in Oil & Gas sector and

Rs. 54 crore in Other Assets. Thus, the Total Investment in these projects amount to Rs. 1,940 crore.

The Company follows a unique asset-light model, with minimal investment in construction plant and machinery. WEL focuses on capturing high value activities such as Engineering, Project Management and Key Procurements in order to ensure high quality and safety standards and timely completion of the projects. The construction is outsourced/ sub-contracted to the best-suited sub-contractor.

This outsourcing gives WEL, the flexibility to take up projects in any part of the country. The rigorous project monitoring and supervision by WEL, during the construction phase, helps in achieving expeditious completion with high quality and reduces operations and maintenance costs during the Operations and Maintenance (O&M) period. It also helps improve returns by earning the early completion bonus. WEL’s strategy is to unlock value from its completed assets either through an outright sale or through refinancing.

WEL is well-positioned to financially close its future BOT & HAM projects. The Company has one of the best credit ratings in the Indian infra sector, with its long-term credit rating at ‘AA’ and short-term rating at A1+. This, combined with Welspun Group’s strong relationship with banks, provides WEL the capability to arrange debt at reasonable rates. keY UPdateS on ProJeCtS:

1 delhi-meerut expressway (delhi-section) road Ham

Project Description: 14 Lane expressway: Six-laning of Delhi-Meerut Expressway & four-laning of NH-24 in Delhi

Completion Cost: Rs. 887 crore

Status: Fifth annuity received in January 2021 within the stipulated time.

Project refinanced with top-uploanof Rs. 65 crore. Present effective rate is 7.82% pa

2 Chutmalpur-ganeshpur & roorkee-Chutmalpur-gagalheri (Cgrg) road Ham

Project Description: 4-Laning of Chutmalpur-Ganeshpur section of NH-72A & Roorkee-Chutmalpur- Gagalheri section of NH-73 in UP & Uttarakhand

Completion Cost: Rs. 1,108 crore

Status: Received PCOD on 5th August 2020, 1st annuity received

Project refinanced at 7.75% pa with top-up loan ofRs. 58 crore

3 gagalheri-Saharanpur-Yamunanagar (gSY) road Ham

Project Description: 4-Laning of Gagalheri-Saharanpur-Yamunanagar section of NH-73 in UP / Haryana Completion Cost: Rs. 1,388 crore

Status: Received PCOD on 31st October 2020, 1st annuity has been received

Project refinanced at 7.75% pa with top-up loan of Rs. 63 crore

4 Chikhali-tarsod (Ct) road Ham

Project Description: 4-laning of Chikhali–Tarsod (Package-IIA) section of NH-6 in Maharashtra

Bid Project Cost (with forecasted escalation): Rs. 1,238 crore

Status: Physical progress is about 83% by Q4FY21 and payment from NHAI pertaining to 4th milestone has been received

5 Package no. am2 (maharashtra amravati) road Ham

Project Description: Upgradation of Roads in Maharashtra State of Two-Laning Road with paved shoulder under MRIP Package on Hybrid Annuity Mode (HAM) Package No. AM 2

Bid Project Cost (with forecasted escalation): Rs. 1,620 crore

Physical progress1 is about 79% by Q4FY21. Payment from Maharashtra PWD pertaining to 3rd milestone has been received. Welspun has also billed Maharashtra PWD for the 4th milestone of which part payment has been received

6 aunta-Simaria (ganga Bridge with approach roads) road Ham

Project Description: Six-Laning from Aunta-Simaria (Ganga Bridge with Approach Roads) Section from km 197.9 to km 206.1 of NH-31 in Bihar. Includes one of the widest extradosed bridge on Ganga river

Bid Project Cost (with forecasted escalation): Rs. 1,346 crore

Physical progress1 of about 26% has been completed by Q4FY21. Receiving progressive payments under Atmanirbhar Bharat

1 Physical progress is based on Schedule G milestone billing of the authority

7 Sattanathapuram-nagapattinam (Sn) road Ham

Project Description: 4-Laning of Sattanathapuram to Nagapattinam (Design Ch Km 123.8 to Km 179.6) section of NH-45A (New NH-332) in Tamil Nadu

Bid Project Cost (with forecasted escalation): Rs. 2,272 crore

Received Appointed Date on 5th October 2020 with 4 lane road & 4 lane structures as against 4 lane road & 6 lane structures specified in the Concession Agreement.

The negative change order because of change in width of structures is estimated by IE to be approx. Rs. 29 crore. Thus, the base Bid Project Cost for the project is forecasted as Rs. 1,976 crore against the original bid project cost of Rs. 2,004.5 crore

First installment of mobilization advance received in December 2020, release of second installment of mobilization advance is in progress

8 mukarba Chowk – Panipat (mCP) road Bot

Completed takeover of a Build-Operate-Transfer (BOT) Toll project, Mukarba Chowk – Panipat from Essel group by harmonious substitution

Original Total Project cost estimated to be Rs. 2,122 crore out of which Rs. 1,593 crore was the balance to be incurred, to complete the project post substitution

Physical progress2 of about 71% has been completed by Q4FY21

NHAI has given in-principle approval regarding change of scope amounting to Rs. 202 crore. In addition, Company is to receive payment of ~Rs. 67 crore against earlier issued change of scope

As per the Concession Agreement, the scheduled concession end date is October 2033, extendable up to 3.4 years based on actual average traffic in year 2025

9 Six-laning of Varanasi-aurangabad nH2 Project road ePC

WEL has reached an agreement with Soma Indus Varanasi Aurangabad Tollway Private Limited (SPV),

a Special Purpose Vehicle promoted by Indus Concessions India Private Limited and Soma Enterprises

Limited, for six-laning of Varanasi-Aurangabad NH2 Project. The project length is around 192 km, and is

situated in Uttar Pradesh and Bihar

The contract value for the Company is estimated at Rs. 2,366 crore (inclusive of GST). Under the

contract, the Company will undertake the procurement and construction, while the Engineering will be

undertaken by the SPV

The project construction is expected to start in August 2021 and likely to be completed in 24 months

subject to the ongoing discussions between SPV and NHAI on De-scoping to non-availability of land

10 dewas water water Bot

Project Description: Modified project involves the supply of treated water of up to 23 MLD to industrial

customers in Dewas

Project Cost: Rs. 146 crore

Commercial operation has commenced from 30th April 2019. FY 2020-21 revenue stands at Rs. 10.3 crore with

EBITDA of Rs. 5.3 crore. Both Revenue and the resultant EBITDA was adversely effected due to extremely

low offtake by industrial clients facing long lockdown / stretched period of inactivity.

2Physical progress is as per the Independent Engineer

11 UP State water and Sanitation mission, namami gange and rural water water ePC
Supply department (SwSm)

WEL in Joint Venture with Kaveri Infraprojects Limited (WEL is the Lead Partner in the Joint Venture with a share of 70%) is empaneled by the UP SWSM for execution of EPC Projects as per the table below for the Project of Survey, Design, Preparation of DPR, Construction, Commissioning and Operation and Maintenance for 10 years of Rural Water Supply:

S no. revenue division district no. of Villages
1 Varanasi Jaunpur 747
2 Varanasi Sant Ravidas Nagar 877
3 Ayodhya Ambedkar Nagar 241
4 Ayodhya Amethi 240
5 Meerut Bulandshahr 439
total no. of Villages 2,544

The estimated aggregate contract value of the above Projects is Rs. 2,500 crore (excluding O&M value and

GST). The final value will be determined on completion of preparation of by us and its approval by the SWSM

Preparation of DPR and Construction of the Project is to be progressively completed in 21 to 28 months and thereafter operated and maintained for a period of 10 years

oil & gas

The Company is invested in the oil and gas sector through a Joint Venture Company - Adani Welspun Exploration Limited (AWEL), where it owns 35% stake. Under the existing portfolio, the Company has three relevant blocks:

Kutch-1 or GK-OSN-2009/1 - AWEL has 25% stake in this block. Declaration of Commerciality (DoC) has been filed by the operator - ONGC. Preparation of Field Development Plan (FDP) is in progress

Mumbai Block or MB-OSN-2005/2- AWEL currently holds 100% ownership interest in Phase I. AWEL has decided to execute Phase – II of the exploration

B-9 Cluster (DSF) – This block is in close proximity to AWEL’s prospective exploratory block (MB/ OSN/2005/2) and ONGC’s B-12 area, which is under advanced stage of development. The field development plan has been submitted to DGH and

AWEL is preparing for the field development

WEL believes that its existing blocks have considerable hydrocarbon potential, which would be quantifiable post the preparation of FDP/during the development stage of each of these blocks. The Company intends to unlock value from these blocks at the right time.

On 15th March, 2021, it announced its first ever gas discovery in the NELP-VII block MB-OSN2005/2. AWEL holds 100% participative interest (PI) and is the Operator of this Block. Spread across

714.6 sq. km., the block is located in the prolific gas-prone Tapti-Daman Sector of Mumbai Offshore basin where production is already underway by another operator/other operators.

The pay zones and flow rates encountered have exceeded the Company’s initial estimates. With the information gleaned from adjoining discovery is of substantial significance for both the

Company and the nation.

The drilling of the current well in March 2021 has confirmed the presence of substantial quantities of gas and condensate in the Block. Out of the three potential zones identifiedduring drilling, two objects tested by Drill Stem Testing (DST) flowed substantial gas and condensate to the surface. Object-I (3m), a clean sandstone reservoir, flowed 9.7 million standard cubic feet per day (mmscfd) of gas along with 378 barrels/day of condensate through a 28/64" choke at a flowing tubing head pressure (FTHP) of 2659 psi. Object-II (15m), another thick clean sandstone reservoir, flowed 9.1 mmscfd of gas along with 443 barrels/day of condensate through a 28/64" choke at a FTHP of 2566 psi.


The infrastructure sector is starting to gain heat due to Government support as it is the backbone to economic and social prosperity. Last year the Government extended their support through the announcement of NIP and this year it reinforced confidence in the sector as highlighted in the Union

Budget 2021-22 announcement. The Government has emphasized the role of private investment for funding this developmental infrastructure program and WEL is well-placed to tap these opportunities.

The Company is selectively targeting to participate in bidding of projects, while preserving its threshold return expectations

Apart from NHAI, WEL will also evaluate road HAM projects of State and Municipal agencies

We are also selectively evaluating EPC and BOT (Toll) projects

On the water segment, the Jal Shakti Ministry’s ‘Har Ghar Nal Se Jal’ scheme of providing drinking water access to all by 2024, is expected to result in a potential opportunity of more than Rs. 6 trillion over the next four years. WEL will actively focus on these projects

The Company will continue to explore inorganic growth opportunities, through a measured evaluation of risk-return parameters

WEL is well-positioned for early financial closure of new project wins, as and when it happens, given its healthy cash balance

The Company will continue to pursue an asset-light model, while focusing on operational excellence and prudent risk management

HUman reSoUrCeS PoLiCY

Human resource is the biggest asset of the Company and it remains one of the core focus areas of the Company. The Management of the Company lays special emphasis on the welfare of its employees and training, welfare and safety measures are undertaken on a regular basis. The Company has a well-qualified and experienced team of professionals with a dedicated human resource department, which is competent to deliver when needed. The Company aims to provide a congenial work environment that respects individuals and encourages professional growth, innovation and superior performance. The total number of employees in the Company as on 31st March 2021 was 398.

diSCUSSion oF FinanCiaL PerFormanCe – FY 2020-21

Note: This section discusses the financial performance on a comparable basis. The numbers might differ from the reported numbers.

Particulars FY 2020-21 FY 2019-20 YoY %
revenue from operations 1,410.20 1,760.00 -19.90%
Other Income 29 52.6 -44.90%
total income 1,439.20 1,812.60 -20.60%
operating eBitda* 174.2 215.1 -19.00%
Operating EBITDA margin 12.30% 12.20% 13 bps
eBitda 197.8 258.9 -23.60%
EBITDA margin 13.70% 14.30% -54 bps
PBT 141 214.1 -34.10%
Pat 107.5 159.3 -32.60%
PAT margin 7.50% 8.80% -132 bps
Cash PAT 129.7 185.1 -29.90%

All figures in Rs. crore, unless stated otherwise

Note: Cash PAT = PBDT Current tax + Non-cash ESOP expenses : Prior figures have been restated wherever necessary

(Rs. crore)

Balance Sheet Snapshot 31stm arch 2021 31st march 2020
net worth 1,819 1,736
Gross Debt 602 310
- Long-Term Debt 505 33
- Short-Term Debt 97 277
Cash & Cash equivalents# 375 529
Net Debt / (Cash) 227 -219
Other Long-Term Liabilities 31 31
Total Net Fixed Assets (incl. CWIP) 54 57
Net Current Assets (Excl. Cash & Cash Equivalents) (adj.)@ 50 178
Other Long-Term Investments and assets (adj.)@ 1,974 1,312

Long-Term Debt (incl. current maturities) Against equipment financing : Short-Term Debt (incl. CP)

#includes FD classified and disclosed under "Other non-current financial assets"

@Temporary funding ofRs. 299 crore has been made in lieu of drawing debt at the subsidiary/JV level in order to minimize the interest cost. This temporary funding has not been included in the cash balance ofRs. 375 crore. The same is reflected in Other Long-Term Investments and Assets.

revenue from operations:

Revenue from Operations down 20% to Rs. 1,439.2 crore in FY 2020-21 from Rs. 1,812.6 crore in FY 2019-20, primarily due to the ongoing impact of COVID in project execution in all projects and Kisan agitation rallies and the NGT ban due to poor weather condition in MCP project.


EBITDA was down 24% to Rs. 197.8 crore in FY 2020-21 from Rs. 258.9 crore in FY 2019-20.


Profit before tax down 34% to Rs. 141.0 crore in

FY 2020-21 from Rs. 214.1 crore in FY 2019-20.

Profit after tax was down 33% to Rs. 107.5 crore in

FY 2020-21 from Rs. 159.3 crore in FY 2019-20.


Networth was at Rs. 1,819 crore in FY 2020-21 as compared to Rs. 1,736 crore in FY 2019-20. The increase is mainly due to increase in retained earnings.

Changes in key Financial ratios*:

ratios Definitions 31st march 2021 31st march 2020 remarks / response
Debtors Turnover Turnover/Average Debtors 5.13 5.16 No significant change
Inventory Turnover Turnover/Average Inventory 506 2,500 Inventory is negligible due to the Company’s back-to-back subcontracting business model; so this ratio is not relevant to track
Interest Coverage Ratio EBIT / Finance Cost 4.17 9.44 Funds raised via NCD during the year, combined with COVID-19 impact on profitability has led to lower interest service coverage ratio
Current Ratio Current Assets/ Current Liabilities 1.65 1.57 No significant change
Debt Equity Ratio Gross Debt / Net Worth 0.33 0.18 The Company has raised long-term funds in the form of NCDs which has resulted in higher debt equity ratio
Operating Profit Margin (%) Operating EBIDTA / Turnover 12.30% 12.20% No significant change
Net Profit Margin (%) Net Profit / Turnover 7.60% 9.10% No significant change on YoY basis, however, decline in profitability is due to COVID-19.
Return on Equity (ROE) % Net Profit/ Net Worth 5.90% 9.20% Refer comments above in net profit margin

*Ratios have been computed based on standalone financial statements