| Part of strong and reputed Welspun Group
Welspun BAPL Private Limited forms part of the Welspun Group, with its entire shareholding held by trustee Mr. B.K. Goenka on behalf of the Welspun Group Master Trust. Established in 1985 by Mr. Balkrishnan Goenka and Mr. Rajesh R. Mandawewala, the Mumbai-headquartered Welspun Group is a diversified conglomerate with a strong track record across sectors such as line pipes, textiles, infrastructure and warehousing. The group has also been expanding its footprint in DI pipes, TMT rebars, stainless steel and alloy products, automotive components, flooring solutions, renewables, green energy, and advanced textiles. Further, the group has a global presence across more than 50 countries and employs over 40,000 people. The key entities of the group include Welspun Corp Limited (WCL), Welspun Living Limited (WLL), and Welspun Enterprises Limited (WEL), having combined market capitalisation of more than Rs. 43,000 Cr. wherein the promoter’s shareholding is worth of almost ~Rs. 23,000 Cr. as on April 15, 2026.
Improving operating performance
Although, the revenue of the company stood moderated at Rs. 239.13 Cr. in FY25 (Rs. 258.50 Cr. in FY24), primarily on account of moderation in the automobile industry in FY25, however, there is improvement in 9MFY26 performance that stood at Rs. 188.55 Cr. as against Rs. 173 Cr. in 9MFY25. Moreover, the company marked an operating margin of 6.75 percent in FY25 (5.10 percent in FY24), improved on account of operational efficiency. Further, in Q3FY26, the company commenced operations of its fifth manufacturing unit in Pune which is expected to improve volumes and operational efficiency, thereby supporting the growth in the scale of operations, which remains a key rating monitorable. Therefore, going forward, the management anticipates improvement in the operating margins.
Healthy financial risk profile
The financial risk profile of the company stood healthy marked by growing net worth that stood at Rs. 224.34 Cr. in FY25 (Rs. 219.72 Cr. in FY24). The net worth also comprises of Rs. 85 Cr. infused by one of group entity (Welspun Financial Services Limited) in the form of optionally convertible debentures (OCDs) and Rs. 30 Cr. of compulsory convertible debentures (CCDs) infused by the promoter, Mr. Balkrishna Goenka which have been treated as quasi-equity. Further, the debt profile of the company consists of minimal long-term borrowings and financial lease liabilities amounting to Rs. 19.15 Cr. as on March 31, 2025 (Rs. 12.29 Cr. as on March 31, 2024) that have been availed for the continuous capex incurred by the company at different units. Therefore, the gearing (debt/equity) ratio stood below unity at 0.09 times in FY25 (0.06 times in FY24). Moreover, the debt protection metrics stood healthy with interest coverage ratio of 8.39 times in FY25 (7.56 times in FY24) and debt service coverage ratio of 2.53 times in FY25 (2.42 times in FY24).
Moderate working capital operations
The working capital operations of the company are moderate marked by gross current assets (GCA) days of 88 days in FY25 and FY24. The debtor levels that stood moderate at 50 days in FY25 (48 days in FY24) wherein the company extends an average credit period of 45 to 60 days to their customers. Further, the company maintains inventory days of around 20-30 days with inventory levels of 26 days in FY25 (34 days in FY24). Moreover, the company receives an average credit period of 60-90 days from their vendors. Hence, working capital limits majorly remain unutilised. Going forward, the working capital operations of the company are expected to remain in the similar levels.
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| Cyclicality associated with automotive industry along with presence in a competitive industry
The company’s performance remains inherently linked to the cyclical nature of the automotive sector, where demand for auto components is directly influenced by vehicle sales, exposing suppliers to inherent industry fluctuations and the operational resilience of OEMs. Further, the automobile industry primarily moves with larger economic cycle, customer preferences, government policies, etc. Additionally, the company operates in a highly competitive industry wherein there is presence of a large number of players in the organized as well as unorganized sectors. Also, the industry is characterized by low entry barriers due to low technological inputs and easy availability of standardized machinery for the production. While the organized segment primarily caters to the OEM segment, the unorganized segment mainly caters to the replacement market and to tier II and III suppliers.
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