Comprehensive SWOT Analysis of Welspun Corp – World’s Second Largest Manufacturer Of Large Diameter Pipes

Quick Stats on Welspun Corp

Founder	B.K. Goenka
Year Founded	1995
Origin	Mumbai, Maharashtra
No. of Employees	26,000+
Company Type	Public
Market Cap	Rs 3,862.05 Crore (2022)
Annual Revenue	Rs 4,642.11 Crore (2021)
Net Income/ Profit	Rs 1,002.11 Crore (2021)

 

Products By Welspun Corp

• Pipes
• Coils
• Plates
• Textiles
• Power
• Oil & Gas
• Construction

Competitors of Welspun Corp

• APL Apollo Tubes Ltd.
• Trident Group
• Goodluck India Ltd.
• Crimson Metal Engineering Company Ltd.
• TamilNadu Steel Tubes Ltd.

Now that we know everything we need to know about Welspun Corp, let’s start with the SWOT analysis of Welspun Corp.

SWOT Analysis Of Welspun Corp

SWOT analysis is like a formula for identifying Strengths, Weaknesses, Opportunities, and Threats (SWOT) that a market possesses for a company. The main objective of this analysis is to help us, as investors and the company, to make business decisions wisely.

By using this method, we analyze where the company is falling short, where it is excelling, and what needs to be worked upon.

To better understand the SWOT analysis of Welspun Corp, refer to the infographic below:

So let us first start by looking at the strengths of Welspun Corp from the SWOT analysis of Welspun Corp

Strengths of Welspun Corp

The strengths of a firm can be positive qualities that help the company to maintain goodwill in the market or give it a competitive advantage. Mentioned below are some of Welspun Corp’s strengths: 

• Talent Management: Human resources are integral to the success of Welspun Corp in their pipes, plates & coil industry.
• Deals Globally: Welspun Corp deals with companies across the globe, including the Fortune 100 companies in the Oil & Gas and Retail sectors. Also, the group consists of enormous subsidiaries in the US, UK and Middle East. 
• Handled Prestigious Projects: Welspun Corp has handled some of the most prestigious projects in the line pipe sector including the deepest pipeline which is installed in the Gulf of Mexico, Peru’s LNG pipeline, Canada to the US longest pipeline project etc. and many more are all handled and completed by the Welspun Corp.
• Strong Corporation: The Welspun Corp corporation has a strong brand name, high-profit margins and revenues and employees more than 27,000 people.
• CSR Initiatives: Welspun Corporation is always ahead to build a better tomorrow for the youth of the nation through continuously working on CSR activities including digital education programs, women empowerment, environment and health safety of people in rural areas. This in turn has increased the brand reputation in the public’s eye.
• Successful in its Market: It is the most successful corporation in the pipes, plates & coil market and it is one of the top companies in India in the line pipes sector. The firm has strong advertising and branding, as well as recognition from various awards.
• Strong Backing: Welspun Corp, which is owned by the Welspun Group, has substantial financial backing and support.

Weaknesses of Welspun Corp

Weaknesses are the areas where the company is lacking behind and needs improvement. Let’s have a look at the weaknesses of Welspun Corp:

• Declining Market Share: The pipes, plates & coil industry is growing at a rapid pace as compared to the company. Hence, Welspun Corp needs to analyse what it needs to do to continue to capture the rising market.
• Expensive Supply Chain & Logistics Network: with the changing market, Welspun Corp has to come up with a new more effective and holistic robust supply chain.
• No More a Monopoly: With the declining cost of setting up a company and building a brand, conglomerates like Welspun Corp are having a hard time remaining a monopoly in their sector.
• Inability to Pivot: Even after so many years, Welspun Corp hasn’t extended its product line significantly. This will be a drawback as and when new players enter the market.
• Decreasing Net Profit: In the quarter ended December 2021, Welspun Corp’s net profit of Rs 88.50 shows a 36.84% decline against Rs 140.12 crore during the previous quarter ended December 2020. Also, in the quarter ended December 2021, sales of Rs 1181.35 crore showed a 7.92% decline against Rs 1282.97 crore during the previous quarter ended December 2020. 

Opportunities for Welspun Corp

Opportunities are uncontrollable external events a person can potentially leverage. These are favourable external factors that could give an organisation a competitive advantage.

• Increasing Government Regulations: It is difficult for the unorganised and illegal players to operate in the pipes, plates & coil industry. This will ensure that Welspun Corp’s customer base increases.
• Customers Migrating to Higher End Products: Customers are increasingly making choices based on quality rather than the price which will help Welspun Corp as it has a strong brand value.
• Successful Past Projects: Welspun Corp has been responsible for executing some of the most difficult projects in the past. This will bring it more business where quality and security is tantamount.
• Strategic Acquisitions: Strategic acquisitions will help the company to achieve further economies of scale and enhance its product portfolio. The joint ventures between rural companies in India have made Welspun Corp the largest pipes, plates & coil manufacturing company in India.
• Expand Businesses: Welspun Corp is planning to expand its businesses in B2C play, through introducing ductile iron pipe manufacturing, setting up a steel plant, a long product mill, and a super speciality business.

Threats to Welspun Corp

Threats are the external factors that may cause loss to the firm over time or all at once. Some of these are stated below keeping Welspun Corp in mind:

• Competition: Competition from existing and foreign players is a huge threat to Welspun Corp. Some of the competitors are Trident Group, Springs Global, Alok Industries etc. Trident Group is its biggest competitor who is the market leader. Due to this ongoing competition, there are price cuts which lead to a decrease in profit margin.
• Government & Environmental Regulations: The government has slightly different and more strict laws for the pipe industry to maintain their control over the consumption of natural resources. While on the other hand organisations concerned about the environment also have their eyes on Welspun Corp activities.
• Changes in the Prices of Raw Materials & End Products: For pipe making, it requires cast iron, polyvinyl chloride (PVC), copper, steel or concrete etc. All these resources are scarce and procuring them is a difficult task. Sometimes it’s very difficult to mine in certain areas hence the prices of these materials keep on increasing and even the end products prices tend to change, this is a backdrop of Welspun Corp.
• Local Distributors: Growing local distributor strengths pose a challenge in some areas since competition pays larger margins to local distributors.

This ends our comprehensive SWOT analysis of Welspun Corp. Let us conclude our learning below.