1. Crude from a high of $60 in Jan, 20 crashed to $20 in May, 20. As a result, Welspun Corp lost 40% of its FY20 order book.
However the company still has 8-9 months of #revenue visibility and can easily service its #fixedcost & employee expenses for FY21.
Management quality+
Consistent Cash Flow generation+
ROCE+
Cheap Valuations
is perfect recipe for a multibagger
#CashFlow from Operations- Last 10 years, accumulated CFO at 6,000 cr and current market price is at 10years low.
Cheap #Valuations - Welspun Corp at FY22 is valued at 1.6 times EV/EBIDTA is giving the company a shutdown valuations.
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Turnaround in Saudi’s Joint Venture’s Operations
The Company has a JV in Saudi Arabia. The loss making operations from this geography was weighing down on the bottom line of the company till FY19
The management had planned to make the business model of the company into #assetlight model. They identified some assets which were weighing the capital employed, but were not contributing to the company’s profits.
#Orderbook as of Q3FY20 was 1,305KMT. Oil & Gas players globally being main clients, Post COVID19 company lost 40% (approx.) of its order book. Current order book stands at 765KMT valued at 6,200 cr giving the company #revenuevisibility for atleast 8-9 months.
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