Welspun Enterprises Ltd Management Discussions.

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 March 31, 2019. This MD&A covers Welspuns financial position and operations for the year ended March 31, 2019. Amounts are stated in Indian Rupees unless otherwise indicated. The numbers for the year ending March 31, 2019 as well as for the previous year are regrouped and reclassified wherever necessary.


This report contains forward-looking statements, which may be identified by the 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 Companys strategy for growth, project development, market position, expenditures, and financial results, 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.


Welspun Enterprises Limited (WEL), formerly known as Welspun Projects Ltd., is a part of the USD 2.7 Billion Welspun Group. The Company operates in the infrastructure space with investments in oil & gas. The Company, in its current form, was created by the merger of the erstwhile Welspun Enterprises Ltd., Welspun Infratech Limited, Welspun Plastics Private Limited and Welspun Infra Projects Private Limited with Welspun Projects, which was renamed as Welspun Enterprises Ltd. In the infrastructure space, WEL is focused on Hybrid Annuity Model (HAM) projects as a developer.


In CY2018, the global economy grew at 3.7%, lower from 3.8% reported in CY2017. The year-on-year marginal dip in growth can be attributed to a moderation in international trade and investment. Global trade tensions have escalated, and the financial conditions continue to tighten but the projection for CY2020 remains positive. Growth in developed economies has moderated, with the notable exception of the United States, where fiscal stimulus had boosted activity for the most part of the year. In contrast, activity in the Euro area has been somewhat weaker, owing to slowdown in net exports. The aggregate growth in Emerging Market and Developing Countries has also edged down in the same period, as a number of countries with elevated current account deficits experienced substantial financial market pressures and appreciable slowdowns in activity.

On the other hand, the Indian economy again, is on a strong footing and gloats of a steady yearly development rate. The Indian economy recorded growth of 7.3% in CY2018. With Gross Domestic Product (GDP) projected to tick up to 7.5% in CY2019, India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years.

Indian government has introduced various structural reforms with regards to the economy. The first half of the year showed positive results post demonetization, implementation of GST, Make in India and many other key reforms brought about to propel the economic development faster. However, the second half of the year saw a credit crunch confronting one of the large infrastructure companies in the country. This development has roiled the countrys financial markets lately, which also triggered concerns about risk in the rest of the countrys NBFC sector. In addition to that, several banks were also placed under PCA (Prompt Corrective Action) by the RBI restricting their ability to lend. As a result of these developments, the infrastructure industry went through a challenging time with debt funding being available only to a few developers with strong financials.

In order to increase the liquidity flow to the Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs), Reserve Bank of India (RBI) introduced several new measures for facilitating easy flow of credit and permitted use of an additional 2% of securities under the Statutory Liquidity Ratio (SLR) for the purpose of maintaining the liquidity coverage ratio. This move offers relief to banks which are struggling with high credit-deposit ratios. Moreover, the Government, under PCA has recently allocated capital infusion of about Rs. 50,000 crore in 12 public sector banks, to help them meet regulatory capital requirements and make growth capital available for the stronger lenders, which should help in stabilizing the overall situation.

In the upcoming year, with the implementation of the measures discussed, the Indian economy is expected to be conducive again for financing of the infrastructure sector. Investment in infrastructure is expected to gain momentum with a new government coming into power post the general elections.


Infrastructure is critical for economic and social development the world over. Across the globe, a well-functioning, modern infrastructure is central to economic development and to quality of life. Infrastructure investment is important for the most advanced economies as well as for those at the early stages of development alike. In developing economies, as roads are built, reliable electricity installed and clean water made available to all, it can have a truly transformative impact on the lives of citizens and the prospects of businesses. In more mature economies too, keeping pace with demand, and building new and upgraded infrastructure, is integral in efforts to sustain economic growth.

Yet, there is often a tendency to under-invest in infrastructure by countries. Several factors are at play that explain this. Firstly, infrastructure typically involves making large upfront investments, while returns may take decades to accrue. Secondly, the risk of uncertain returns can make raising finances challenging. Thirdly, the benefit to society of an infrastructure project may often be greater than the private returns generated for the operator. These challenges are often addressed through government regulation and effective Public Private Partnership (PPP) models.

As per Global Infrastructure Outlook, India is the second largest infrastructure market in Asia after China. Over the last few decades, India has seen a rapid growth in its urbanization, population and wealth. Indias ambition of sustaining this high growth depends majorly on availability of infrastructure. Despite Indias significant infrastructure investments (about 9% of GDP), the country is plagued with a weak infrastructure short of meeting the needs of a growing economy and growing population. With the increase in population in India and increase in GDP per head to USD 4,800 by 2040 from current levels of only USD 1,600, it is expected that there will be significant demand for infrastructure in India over the next 25 years. India will require about USD 4.5 Trillion investment in infrastructure by 2040 in order to cater to the increased population and income.

Road Infrastructure

In any economy, transport infrastructure acts like a baseline to ensure continuous smooth movement of public and goods. With the development of infrastructure in India, the country has progressed at a rapid pace and today there is an availability of several modes of transport by land, water and air. Road transport is the primary and preferred mode of transport for most of the population due to its ease of accessibility and flexibility. Aside from encouraging the movement of goods and passengers, road transport plays a crucial role in the economic development of a nation by increasing the productivity and competitiveness.

Indias road transport system is among the most heavily utilized system in the world. Transport sector accounts for 6% of Indias GDP with road transport having around 70% share. More than 65% of freight and 85% of the passenger traffic in the country is handled by roads. India has a road network of over 5.9 Million Kms, which makes it the second largest road network in the world. This shows the significance of the road transport and justifies the undivided focus of Government on the sector.

Though FY 2017 and FY 2018 witnessed record awarding of projects, new project awards in FY 2019 remained muted due to delays in land acquisition and issues around financial closure of infrastructure projects. During FY 2019, total length of highways awarded in the country was 5,543 kilometers, of which 2,222 kilometers were awarded by NHAI and the Ministry of Road &

Highways collectively. However, the order book resulting from ordering in FY 2017 and FY 2018 led to an all-time high highway construction of more than 10,000 Kilometers or approximately 30 Km per day in FY 2019. This was the best year in the last decade as far as highway construction in the country is concerned, as the focus was more on execution than new awards from NHAI and other Government bodies.

In addition to this, the Government has come up with several mega projects like Bharatmala Pariyojana, a new umbrella program for the highways sector that focuses on optimizing efficiency of freight and passenger movement across the country by bridging critical infrastructure gaps through effective interventions like development of Economic Corridors, Inter Corridors and Feeder Routes, National Corridor Efficiency Improvement, Border and International connectivity roads, Coastal and Port connectivity roads and Greenfield expressways. A total of around 24,800 Kms are proposed to be constructed in Phase I. In addition, PhaseIalsoincludes10,000Kmsof balance road works under NHDP. Estimated outlay for Phase I is Rs. 5,35,000 crore. The objective of the program is to achieve optimal resource allocation for holistic highway development/ improvement. In order to fund this huge program, NHAI is exploring and using different options for funding like Toll Operate Transfer (ToT) auction, different period bonds through private & public placement and equity partnerships.

In order to encourage private participation in the road construction segment, Government is coming up with project awards under different formats. Hybrid Annuity Model (HAM), the latest variant, is an innovative model of project development which divides the risk between the developer and the authority. HAM was introduced in January 2016, to kickstart road projects that had stalled under the previous regime due to issues like acquisition of land, construction risk, tolling risk, traffic changes and difficulty in financing the debts for the projects.

HAM model is a win-win model for both the developer and the concessioning authority. From the point of developer, 40% of the project cost in HAM contracts is provided by the authority (such as NHAI) as construction support, thus reducing equity requirement for the developer to a minimal level of 12-15%. Since fund disbursement from the Government is on time and happens during the construction phase itself, projects have less chance of getting stuck because of financing reasons. The authority also ensures necessary clearances and 80% of the land before the appointed date. During the operational period, the developer bears no toll collection risk and its O&M gets covered by separate payments from the authority. For the authority, capital expenditure is deferred under HAM and requires lesser amount of funds during construction years in comparison to projects on EPC mode. By following HAM, the authority would be able to finance 2.5 times of what it could on EPC mode. In addition to this, the authority gets revenue from toll collections and assured maintenance by the concessionaire for the concession period.

A few of the States are coming up with their versions of HAM model to make projects more attractive to developers and to the lenders for financing. Maharashtra, for example, provides 60% of the funds during construction instead of 40%, and the payment tenure for the remaining amount has been cut down from 15 years to 10 years. It also puts 50% of its contribution during construction, upfront in an escrow account for additional comfort to lenders.

Success of HAM in becoming a preferred mode of awarding projects can be seen from the fact that it constituted almost half of the total projects awarded by NHAI in last two years vs only 8% in FY 2016.

Water Infrastructure

India is home to 16% of the worlds population, covering 2.5% of the worlds land area, whereas it has only 4% of the worlds water resources. With increasing water demand putting pressure on availability and quality, India is currently ranked 120 among 122 countries in the water quality index.

India is suffering from the worst water crisis in its history. As many as one Billion people live in areas of physical water scarcity, of which 600 Million Indians face high to extreme water worries because of insufficient access to safe water. If the current scenario continues, it is estimated that by 2030, 40% of Indias population may not have access to drinking water and eventually resulting in about 6% loss to the countrys GDP. Currently, critical groundwater resources (about 40% of our water supply) are being depleted at unsustainable rates. There is a likelihood that 21 cities including New Delhi, Bengaluru, Hyderabad & Chennai will run out of ground water by 2020 affecting nearly 100 Million people. The severity of current baseline water stress can be seen all across the country. (refer Fig.4)

In order to combat this situation, India will have a cumulative investment requirement from 2016 to 2040 of USD 373 Billion in water infrastructure. To overcome the lack of efficient infrastructure, Indian Government is coming up with overall improvement plans for the sector. India is set to embark on an ambitious exercise to link over 70 of its rivers. Central governments ambitious Rs. 5.5 Trillion River Inter-link plan is a large-scale civil engineering project that aims to link rivers. The mission of this program is to ensure greater equity in the distribution of water by enhancing its availability in drought-prone and rainfed areas. The National Water Development Agency (NWDA) has identified 30 links for interlinking projects for transferring water from water surplus basin to water deficit basins.

Indias flagship program for rejuvenation of River Ganga, Namami Gange has been launched; a total of 254 projects costing Rs. 247 Billion have been sanctioned for various activities like sewage infrastructure, river front development, river surface cleaning and public participation. This will not only create new infrastructure, but also rehabilitate the old and dilapidated Sewage Treatment Plants (STPs). Moreover, the ministry is implementing other key projects such as Pradhan Mantri Krishi Sinchayee Yojana.

Successful implementation of these plans will require a strong public private partnership. Thus, after reviving private sector participation in the road infrastructure sector, the Government is making efforts in water infrastructure as well. On the similar lines of HAM road infrastructure model, the Government has given an approval on Hybrid Annuity-PPP model for water infrastructure. As per this model, 40% of the capital cost will be paid by the Government to the developer during construction and the remaining capital investment is made by the developer through equity and debt financing.

Oil and Gas

The world economy continues to expand at a faster pace and is expected to increase by two-fold over the next 20 years, driven by increasing prosperity in fast growing developing economies, with India, China and other Asian countries together accounting for two-thirds of the increase. This growth will require energy and therefore, global energy demand is expected to grow by about 30% by2040.Indiasdemandforenergy in the same period is expected to expand by 156%, nearly three times the overall non-OECD growth of 56%, also outpacing each of the BRIC countries: China (+28%), Brazil (+65%), and Russia (+7%). India is already the third-largest consumer of crude oil and petroleum products in the world after USA and China, the countrys share in global energy consumption is anticipated to jump significantly from 6% in 2019 to 11% in 2040.

The expansion in Indias energy demand will be significantly contributed by progressive growth in Indias GDP, advancement of manufacturing sector and growing population size. Moreover, with rising income levels, demand for automobile is also estimated to rise, which in turn will raise the demand for oil and gas. By 2040, oil imports are expected to rise by 101%, while the gas imports are expected to increase by 242%, which signifies Indias high reliance on imports for majority of its oil and gas consumption.

In order to meet the growing demand and reduce high dependency on imports, various initiatives have been taken by the Government for strengthening Exploration & Production (E&P) segment of oil and gas in India:

• Approval of the Hydrocarbon

Exploration and Licensing Policy (HELP), which enables ease of doing business for E&P segment, by offering a single license for both conventional and unconventional Hydrocarbons

• Under the flagship policy

HELP, the Government launched Open Acreage

License Program (OALP) as well, which allows the companies to carve out area for petroleum exploration and production

Setting up of National

Data Repository (NDR) to assimilate and preserve the entire exploration and production data of 3.14 Million Sq. Kms of Indian sedimentary basins, which will not only facilitate global E&P investments but also support research in E&P domain

To increase exploration activities, attract domestic and foreign investment in unexplored/ unallocated areas of sedimentary basins, enhance domestic production of oil and gas from existing fields and promote ease of doing business by streamlining and expediting the approval processes, the Government of India recently announced policies to allow contractors to have full marketing and pricing freedom to sell on arms-length basis, and also to have price discovery on the basis of transparent and competitive bidding.


Welspun Enterprises Limited (WEL) 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 its focus majorly on HAM, significant cash balance and asset-light model. WEL has 7 HAM projects in its portfolio taking the total HAM portfolio size to Rs. 85+ Billion and 590+ Kms. Unexecuted order book at the end of FY 2019 stands at Rs. 52+ Billion implying a book-to-bill ratio of approximately 3 times. This implies a strong revenue growth visibility for next 2 years.

The Company follows a unique asset-light model, with minimal investment in construction plant and machinery. WEL only focuses on the high value-add activity - Project Management Consultancy (PMC), ensuring quality, safety and timely completion of the projects in its portfolio. The entire construction is outsourced/subcontracted to the best-suited sub-contractor. This outsourcing gives WEL 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 early completion and reducing operations and maintenance during the O&M period. It also helps improve returns by earning the early completion bonus. With focus only on HAM, working capital requirements are also minimal. Under HAM, the risks are significantly reduced once the construction is over. WELs strategy is to unlock value from its completed assets either through an outright sale or through refinancing.

The Company has a net cash balance of Rs. 3 Billion, unlike most other companies in the infrastructure space that are burdened with high amount of debt. This cash balance ensures that the Company has ample capital for growth as well as supports the equity required for the HAM projects. In addition to the Rs. 3 Billion cash balance, the Company has around Rs. 1.1 Billion which is given as temporary funding to subsidiaries/JVs in lieu of drawing debt at that level. This takes the total growth capital to Rs. 4.1 Billion.

Thus, WEL is well-positioned to financially close its HAM projects. It has the capability to arrange debt at reasonable rates, given Welspun Groups strong relationship with banks and WELs robust credit rating.


WEL started FY 2019 with five HAM projects and added two more HAM projects to its portfolio. The Company won the Sattanathapuram - Nagapattinam project (in Tamil Nadu) from NHAI as well as Package No. AM2 (in Amravati, Maharashtra) from Maharashtra PWD during the year, taking the total HAM portfolio size to Rs. 85+ Billion and 590+ Kms. During the year, WEL also demonstrated robust execution on its HAM project portfolio. The Company got appointed date and started construction on two of its projects, in addition to further progress on the two under-construction projects. The unexecuted EPC order book at the end of the year was Rs. 52+ Billion (excluding GST).

The year marked the completion of Indias first HAM project - Delhi-Meerut Expressway Package - 1 in a record 19 months (11 months prior to the scheduled completion), demonstrating operational excellence.

Ham road Projects: All projects are with full financial tie-ups as detailed below:

Delhi-Meerut Expressway Package 1

Project description: 14-Lane expressway: Six-laning of Delhi – Meerut Expressway & 4-laning either side from 0th km to existing km 8.4 of NH-24 in Delhi.

Completion cost: Rs. 8.87 Billion

Project status: WEL started construction on the countrys first 14-lane expressway and one of the first projects under the Hybrid Annuity Model (HAM), in November 2016. While the construction schedule was 30 months, the Company completed the project and got COD within 19 months. This demonstrates the operational excellence and superior project management by WEL, with its outstanding performance being appreciated by the NHAI as well.

WEL also received the first annuity in January 2019 within the stipulated time of 15 days from the completion of 6 months from COD. Annuity details are given in the below table:

Sr. no. Description Amount
(Rs. in Million)
1 1st Annuity installment 112
2 Interest on completion cost 261
3 O & M payments 22.1

Early completion bonus of Rs. 271 Million (excluding GST) has also been received by the Company.

Gagalheri-Saharanpur Yamunanagar (GSY)

Project description: 4-laning of Gagalheri-Saharanpur Yamunanagar section of NH-73 in UP / Haryana. Bid Project Cost: Rs. 11.84 Billion Project Status: WEL acquired a stake in this project from the MBL group and became the project sponsor in January 2018. NHAI declared the Appointed Date for the Project as January 26, 2018. Physical progress of about 60% has been completed by end- FY 2019 and execution is in full swing in this project.

Chutmalpur-Ganeshpur & Roorkee-Chutmalpur-Gagalheri (CGRG)

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

Bid Project Cost: Rs. 9.42 Billion

Project Status: WEL acquired a stake in this project from the MBL group and become the project sponsor in January 2018. NHAI declared the Appointed Date for the Project as February 28, 2018. Physical progress of about 60% has been completed by end- FY 2019 and execution is in full swing in this project.

Aunta-Simaria (Ganga Bridge with Approach Roads)

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.

Bid Project Cost: Rs. 11.61 Billion

Project Status: The Company was awarded the project in August 2017 by NHAI. NHAI declared the Appointed Date for the Project as August 30, 2018. Physical progress of about 10% has been completed by end-FY 2019 and execution is in full swing in this project.

Chikhali-Tarsod (Package-IIA)

Project description: 4-laning of Chikhali–Tarsod (Package-IIA) section of NH-6 from km. 360.0 to km. 422.7 in Maharashtra.

Bid Project Cost: Rs. 10.48 Billion

Project Status: WEL acquired a stake in this project from the Vishvaraj group and became the project sponsor in January 2018. NHAI declared the Appointed Date for the Project as January 16, 2019. Physical progress of about 17% has been completed by end-FY 2019 and execution is in full swing in this project.


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: Rs. 20.04 Billion

Project Status: Received Letter of Award (LoA) in July 2018; signed concession agreement on December 3, 2018. The Company has submitted financial closure documents to NHAI and is awaiting appointed date.

Package No. AM2 (Maharashtra Amravati)

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

Key Features: Concessionaire to receive 60% of the Bid Project Cost (BPC) during the construction period (vs. 40% in NHAI projects); balance 40% of BPC and O&M payments is paid back in semi-annual installments in a period of 10 years (vs. 15 years in NHAI projects)

Bid Project Cost: Rs. 14.6 Billion

Project Status: Received Letter of Award in Nov 2018; concession agreement signed on January 10, 2019. Company has submitted financial closure documents to the authority and has received the appointed date in May 2019.

Apart from the HAM projects, the Company also has a small portfolio of legacy BOT projects. The Company currently operates two BOT projects - one in road & water each. The projects are:

• Himmatnagar bypass in Gujarat: Rs. 15.7 Million toll collection in the year

• Dewas water project in Madhya Pradesh: This project, which involves supply of treated water of up to 23 MLD to industrial customers in Dewas, has been modified under the Madhya Pradesh Swiss Challenge Guidelines. Construction of the modified project, with project cost of Rs. 1.46 Billion (including subsumed debt of old project), started in May 2018 and provisional COD was received w.e.f. from April 30, 2019.

During the year, the Company handed back Raisen–Rahatgarh BOT project to the authority on October 9, 2018. Also, the Company has a policy of regularly divesting completed assets in order to recycle capital. During the year, the 13% residual stake in Dewas Bhopal BOT road project was sold for Rs. 577 Million. With this, the total consideration received by Welspun was Rs. 1,841 Million as against its fund infusion of Rs. 854 Million implying a multiple of 2.15x.


With a robust unexecuted EPC order book of Rs. 52+ Billion (Excluding GST) which is at a book-to-bill ratio of approximately 3 times, WEL has a good revenue visibility for next 2 years. The Company will continue to focus on operational excellence and prudent capital allocation by investing in projects which meet the Companys return-threshold. WEL plans to continue its approach of prudent bid/buy strategy to strengthen its HAM portfolio. Major projects targetted will be the projects where differentiation is possible from the developer side. The Company will also look to tap opportunities in State road HAM projects on a selective basis. As part of its diversification strategy, WEL is looking to grow its business in the water infrastructure segment. The Company sees huge potential in the water projects space with focus on water transmission, water treatment and desalination projects, and expects to replicate its road sector success in water segment as well.

On the existing project portfolio, the Company is targeting to complete construction before schedule on all the projects. Once completed, WEL will look to divest or securitize / refinance these completed projects in order to unlock capital and create long-term sustainable value for the stakeholders.


The Company is invested in the oil and gas sector through a Joint Venture Company - Adani Welspun Exploration Ltd. (AWEL), where it owns 35% stake. Under the existing portfolio, the Company has four 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. Once it is approved by DGH, Field Development Plan (FDP) will be prepared and submitted

• 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

Palej or CB-ONN-2005/4 –WEL and Adani Group directly hold 35% and 55% respectively in this block. The consortium had stuck oil in the block but termination notice was served by MoPNG due to default of Naftogaz India holding 10% stake; non-defaulting partners

Adani Group and WEL have requested for transfer of this 10% stake to Adani/AWEL. The request is pending for approval by DGH/MoPNG

• B-9 Cluster (DSF) This block is in close proximity to AWELs prospective exploratory block (MB/OSN/2005/2) and ONGCs B-12 area, which is under advanced stage of development. The field development plan has been reviewed by DGH and development is expected to start soon. The anticipated capital cost is USD 110 Million at the AWEL level During the year, AWEL decided not to participate in future exploration/appraisal of another of its blocks – GK-OSN-2009/2 in Kutch.

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


WELs performance has been widely appreciated and it has won several awards during the year:


1. Chosen by Construction World magazine as the ‘Fastest growing Construction Company in the ‘Small segment.

2. Selected by Construction World magazine as one of the ‘top Challengers - companies who have demonstrated their ability to grow over the previous year despite challenging circumstances.


1. DME Project was a Finalist in the ‘annual awards for excellence in national Highways instituted by the Ministry of Road Transport and Highways (MoRTH). The project was chosen as a CHAMPION in the category of excellence in Construction Management (PPP).

2. Awarded ‘Besttransportation Infrastructure Project by Indian Concrete Institute.


Welspun is proactive to the immediate global need for sustainable practices and shares a cherished bond with the communities it steadfast commitment to areas of Education, Empowerment, Environment and Health, Welspun works closely with the surrounding villages to touch, heal and better the quality of lives around the world. In everything Welspun does, there is a strong commitment to sustainable development, balancing the needs of the present with those of the future.

With an aim to encourage sanitation practices in women and empowering them to earn a better livelihood, Welspun initiated a project on promoting menstrual hygiene management in the villages. Through this initiative, Welspun has enabled 48 women entrepreneurs from 23 villages reaching out to 8,000 women across Anjar, Vapi, Saharanpur, Dewas, Bihar, Uttar Pradesh and Telangana. By 2020, the Company is well poised to scale the project up, creating 200 entrepreneurs and impacting half a Million women across the country.

In areas nearby its construction sites, the Company has taken initiatives for:



• Land acquisition issues

• Multiple clearances and associated delays

• Difficulties in raising long-term funding

• Too many assets available for sale combined with limited buyers, reducing valuation of assets

• Inadequate regulatory framework

• Interest rate risk


• Commercial viability of discoveries

• Volatility of oil & gas prices

• Infrastructure constraints for exploration and evacuation of products

• Regulatory controls


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 headcount in the Company as on March 31, 2019 was 437.


Management of the Company maintains adequate internal control system which is designed to provide reasonable assurance that assets are safeguarded and transactions are rightly executed and recorded in accordance with management authorization and accounting policies.

All the records are adequately maintained for preparation of financial statements and other financial information. Apart from internal controls, the Company also audits the efficiency and security of its operations, its information technologies and data, in accordance with the global standards. The Audit Committee reviews internal audit reports as well as the internal control systems and financial disclosures.


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

The standalone financials are as shown below:

Income Statement Snapshot (Rs. Million) FY 2018-19 FY 2017-18 YOY growth
Revenue from operations 17,394 9,972 74%
Other Income 546 956 -43%
Total Income 17,940 10,928 64%
EBITDA 2,369 1,660 43%
EBITDA margin 13.2% 15.2%
PBT 2,122 1,385 53%
Exceptional gain 199 142
Reported PBT 2,320 1,527 52%
Pat 1,537 1,097 40%
PAT margin 8.6% 10.0%
Cash Pat 1,809 1,298 39%

Note: Cash PAT = Reported PBDT – Current tax + Non-cash ESOP

Balance Sheet Snapshot (Rs. Million) 31st mar 2019 31st mar 2018
Net Worth 15,993 14,573
Gross Debt 1,709 664
- Long-Term Debt (incl. current maturities) 130 521
- Short-Term Debt 1,579 143
Cash & Cash equivalents 4,737 7,135
Net Debt /(Cash) (3,028) (6,471)
Other Long-Term Liabilities 315 303
Total Net Fixed Assets (incl. CWIP) 645 87
Net Current Assets (Excl. Cash & Cash Equivalents) 1,328 1,053
Other Long-Term Investments and Assets 11,306 7,263

Note: Cash & Cash Equivalents include liquid Investments & ICDs

Revenue from operations:

Revenue from Operations up 74% to Rs. 17,394 Million from Rs. 9,972 Million, primarily due to increased execution on multiple projects.


EBITDA up 43% to Rs. 2,369 Million from Rs. 1,660 Million with higher execution.


Profit before tax (before exceptional) up 53% to Rs. 2,122 Million in FY 2019 from Rs. 1,385 Million in FY 2018.

Profit after tax up 40% to Rs. 1,537 Million in FY 2019 from Rs. 1,097 Million in FY 2018.

Net Worth:

Networth was at Rs. 15,993 Million in FY 2019 as compared to Rs. 14,573 Million in FY 2018.


The Companys gross debt stands at Rs. 1,709 Million in FY 2019 compared to Rs. 664 Million in FY 2018. Taking into consideration, cash and cash equivalents of Rs. 4,737 Million, the Net Debt/ (cash) stood at Rs. (3,028)

Million in FY 2019 as compared to Rs. (6,471) Million in FY 2018. The cash & cash equivalents exclude Rs. 1,091 Million which is given as temporary funding to subsidiaries/ JVs in lieu of drawing debt at that level. The temporary funding was done in order to minimize the interest cost at the SPVs and the funds are available to WEL, on demand. The reduction in net cash was primarily on account of investments in SPV for under construction HAM projects.


Ratios Definitions 31-mar-19 31-mar-18 Remarks
(i) Debtors Turnover Turnover / Average Debtors 7.64 14.98 The Company had done temporary funding of its subsidiaries through outstanding receivables. This was done in order to minimize the interest cost at the subsidiaries
(ii) Inventory Turnover Turnover / Average Inventory 2,395 1,412 Inventory is negligible due to the Companys back to back subcontracting business model; so this ratio is not relevant to track
(iii) Interest Coverage Ratio EBIT / Interest 20.36 20.79 Interest costs grew in line with the EBIT
(iv) Current Ratio Current Asset/ Current Liabilities 1.70 3.18 Decrease in cash due to investment in SPVs has resulted in lower current ratio
(v) Debt Equity Ratio Gross Debt/Net Worth 0.10 0.04 Short-term debt taken (mostly in the form of CPs) has resulted in higher debt equity ratio
(vi) Operating (EBITDA) Profit Margin (%) Operating EBITDA/Turnover 12.1% 9.5% Operating profit margin is higher on account of improved profitability as fixed costs were spread over higher turnover as execution picked up pace
(vii) Net Profit Margin (%) Net Profit/ Turnover 8.8% 11.0% Net Profit Margin reduced mainly due to reduction in treasury income
(viii) Return on Net Worth (%) Net Profit/Net Worth 9.6% 7.5% Improvement in net profit due to higher operating profit, resulted in better return on net worth