WELCORP Q4 FY26 Results Analysis: EBITDA Beats by 17.2%, Revenue Misses 4.2%

WELCORP's Q4 FY26 numbers came in strong, with revenue of Rs. 16,770.14 Cr (+19.97% YoY) and PAT growth of -14.80% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

WELCORP delivered a mixed quarter with EBITDA beating guidance by 17.2% (Rs.2,578 cr vs Rs.2,200 cr target) while revenue missed by 4.2%. The company demonstrated strong operating leverage with margin expansion of 155 bps and excellent cash conversion (CFO/PAT 1.98x). Steel segment continues to perform well with 20.89% YoY growth and order book of Rs.25,350 cr providing revenue visibility. Key catalysts include US LSAW plant commissioning in H1 FY27 and KSA greenfield operational in Q1 FY27. The Others segment (Sintex) remains a concern with ongoing losses.

Key Investment Insights

Key Positives

• EBITDA of Rs.2,577.98 cr beat FY26 guidance of Rs.2,200 cr by 17.2%
• Operating margin expanded 155 bps YoY to 15.63%
• CFO/PAT conversion improved to 1.98x indicating strong earnings quality
• Finance costs declined 44.08% YoY to Rs.212.17 cr
• Steel segment revenue grew 20.89% YoY to Rs.16,134.11 cr
• Order book at record high Rs.25,350 cr with visibility through FY28
• Free cash flow positive at Rs.672.07 cr despite heavy capex
• ROCE exceeded 20% guidance target at 24%

Risk Factors

• Revenue missed FY26 guidance by 4.2% (Rs.16,770 cr vs Rs.17,500 cr target)
• Others segment (including Sintex) recorded loss of Rs.101.55 cr in FY26
• Q4 PAT declined 46.96% YoY to Rs.370 cr due to absence of exceptional gains
• Deferred tax expense increased 239.75% YoY to Rs.220.16 cr
• Order book at Rs.25,350 cr vs original Rs.30,000 cr target