Welspun Gujarat April-June net almost doubles

MUMBAI (Reuters) - Steel pipemaker Welspun Gujarat Stahl Rohren's April-June profit nearly doubled on volume growth and a one-time gain on account of foreign exchange fluctuation, a senior official said on Thursday.

The company posted a net profit of 1.38 billion rupees in the April-June quarter on a 72 percent rise in net sales of 18.8 billion rupees. It earned 375.3 million on reversal of foreign exchange provision and coil sales.

"It's mainly because of larger volumes," Director Akhil Jindal told Reuters over the telephone. "We saw an almost 50 percent growth in pipe volumes while plate volume is three times of last year."

"We did not have to do forex provisioning either, which happened in every quarter of last year," he added.

Demand for pipes was higher in the April-June quarter as optimism of an economic turnaround prompted the oil & gas transporters to push through their orders.

Welspun added orders worth 12 billion rupees in April-June, taking its current order book to 68.4 billion rupees.

Expectations of higher demand to transport gas after Reliance Industries started production from the Krishna Godavari basin and the government's thrust to expand the nation's oil & gas network prompted Welspun to expand capacity, Jindal said.

Its board approved setting up a 0.3 million tonne pipe mill in south east India and plans to move another mill with a similar capacity into a non-special economic zone at Anjar, Gujarat, it said in a statement.

It will invest 5.5 billion rupees in the two pipe projects, which will be commissioned in 12-15 months, it added.