Banking on the growth in home textiles, pipes and infrastructure businesses as well as Sintex, Welspun Group is eyeing revenues of Rs 1 lakh crore in the next five-seven years, compared with more than Rs 40,000 crore at present.
“We expect to grow at 15%-20% in the next five to seven years,” said BK Goenka, chairman of Welspun World. Home textiles is having a compounded annual growth rate (CAGR) of 15% while the line pipe business is also doing well with the addition of DI Pipes and other brands, he said.
Goenka said Sintex will be another growth story in three-four years. “It will be more on the value than the revenue, because multiples of Sintex are different. Infra is growing at a 20-25% CAGR every year. So, these are the growth engines of the group.”
He said the group will incur capex of Rs 10,000 crore to Rs 12,000 crore over two-three years.
Goenka said Welspun is expanding pipes business in Saudi Arabia, the US and India and also growing its home textiles. Two weeks ago, the board of Welspun Corp approved investment of $100 million by Welspun Pipes which is expected to consolidate its leadership position in the oil and gas segment in the US.
Goenka said the group will benefit in a big way from the government’s infrastructure push. “So, there is a big scope. We are hoping to grow infrastructure business at 20-25% CAGR and that itself will become over Rs 20,000 crore in five to seven years.”
“All this growth story depends on the country. If India grows at 7-8% and become a $10-trillion economy by 2030 or 2032, there is definitely scope and size for everyone to grow,” Goenka said.
Sintex turnaround
Goenka said after turning around Sintex, the group is working on its growth plans. “Sintex is a well-known brand. It is synonymous with water tanks. The company was never bad, but it was basically a management issue,” he said, adding that the strong brand recall and right kind of working capital and approach are putting it on the path of growth.
“The recovery (under Sintex) has been done. With a target to grow over the next three-four years, we are spending around Rs 2,400 crore across plants in India,” Goenka said.
The group, which has four plants, is setting up three manufacturing units in Bhopal, Telangana and one city in north India. They will add capacity not only in water tanks, but also the entire bouquet of building materials, to be launched under the Sintex brand.
Green energy
The group is re-entering green energy after it selling its renewable energy portfolio to Tata Power’s RE arm in 2016.
It has signed an MoU with the Maharashtra government to set up a 1.2-GW pumped hydroelectric storage project at an investment of about Rs 5,000 crore. The group is also getting into green hydrogen and green ammonia.
Goenka said the group is building last-mile warehousing facilities and city distribution centres to cater to quick commerce and e-commerce firms. “Demand for warehousing is not low, but it is shifting. All quick commerce players want last mile. We are setting up such centres in Thane, Navaseva and Navi Mumbai, and we are changing the whole bit of it,” he said.
The group will have a warehousing portfolio of 10 million sq ft and pipeline of 10 million sq ft over the next three-four quarters, Goenka said. Its warehousing unit raised Rs 2,275 crore in July this year in the biggest fundraise by any domestic warehousing investor-cum-developer.