In the age of tariffs, overseas bet turns lucky for Welspun

Trump's backing for US oil industry, benefits from the India-UK trade deal buoy Welspun

- T. Surendar

On Thursday morning, Welspun Corp stock was up 10%, and the number of shares traded was the highest in the previous 12 months. The stock closed at its 52-week peak of 895 on the BSE. The company, which makes steel pipes for transporting oil, had just announced its earnings, reporting a 67% increase in consolidated net profits over the previous financial year despite a 19% fall in annual revenues.

On Friday, the stock gained further. The sudden confidence of investors should come as a surprise. There was some serious uncertainty surrounding its business after President Donald Trump imposed a 25% tariff on steel imports into the US in early March. Welspun, which has a pipe-making factory in the US, imported steel as raw material, which made the landed cost of the metal highest compared to anywhere else in the world. It looked like Welspun Corp. was staring at a prolonged downturn. A month after Trump announced tariffs, the stock was down 15%.

Says B.K. Goenka, chairman of Welspun Corp.: "Trump's big support for the local US oil industry is seeing a surge of investments in the sector. There is a huge demand for pipes, causing their prices to increase and we are doubling down on the business."