Welspun Michigan says releases can restore FY27 growth

Welspun Michigan Engineers Limited said delayed releases on selected projects reduced H1 FY27 revenue to Rs 318 crore, but management expects execution to improve in H2 as releases progress and recent orders mobilise. Its Rs 2,279 crore order book at 30 September 2026 underpins an unchanged medium-term target of 15%-20% revenue growth.

Why did Welspun Michigan’s H1 FY27 revenue moderate?

Welspun Michigan said H1 FY27 revenue moderated because selected customers released work later than planned, deferring execution into subsequent periods rather than removing projects from its backlog. It reported H1 revenue of Rs 318 crore, earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 63 crore, and profit after tax of Rs 35 crore.

The timing effect also appeared in Q2 FY27, when Welspun Michigan reported revenue of Rs 139 crore, EBITDA of Rs 25 crore and profit after tax of Rs 12 crore. Managing Director Saurin Patel described the year-on-year moderation against a stronger prior-year base as a phasing issue, adding that releases were now progressing.

Management expects H2 FY27 execution to improve as existing projects ramp up and new awards are mobilised. In the earnings-call discussion, Welspun Enterprises Managing Director Sandeep Garg said Welspun Michigan was expected to record growth for FY27 as a whole, although management did not provide a precise full-year revenue forecast.

What backlog supports Welspun Michigan’s H2 FY27 outlook?

Welspun Michigan held an order book of Rs 2,279 crore on 30 September 2026, which management described as roughly three years of revenue at its current run rate. The backlog includes the Rs 995 crore DGT project, providing a substantial identified source of work as project releases convert into execution.

Tunnelling accounts for 53% of the order book, pumping represents 21%, and rehabilitation makes up 19%, with the balance in other activities. This mix means tunnelling is the largest segment by backlog, while pumping and rehabilitation provide additional project categories for execution during FY27 and later periods.

Order inflow to the date of the Q2 FY27 call was about Rs 450 crore from three rehabilitation projects and one micro-tunnelling project. The awards include two World Bank-funded Ahmedabad Municipal Corporation pipeline-rehabilitation projects covering eastern and western city corridors, plus a New Delhi Municipal Corporation rehabilitation project.

Welspun Michigan is pursuing Rs 1,500 crore to Rs 1,800 crore of opportunities through what Patel described as disciplined, margin-focused bidding. Management expects to add Rs 700 crore to Rs 1,200 crore of new orders during the balance of FY27, but these are expectations rather than secured awards.

Which projects could increase Welspun Michigan’s execution?

Welspun Michigan’s project schedule includes several milestones across tunnelling and rehabilitation work. Main-shaft construction on the DGT project began after permissions were received in June 2026, and the shaft had reached a depth of 30 metres by the Q2 FY27 earnings call.

The 5.84-kilometre Priority Sewer Tunnel Phase-I, or PST-1, completed its drive from Don Bosco to the New Malad intermediate pumping station when the tunnel-boring machine broke through on 9 October 2026. Management said PST-1 remained on track for completion by September 2027, while the 4.6-kilometre PST-2 tunnel was progressing towards January 2028 completion.

The approximately Rs 400 crore Mithi tunnel project is designed to divert dry-weather flows from Bapat Nala and Safed Pul Nalla to the Dharavi Wastewater Treatment Facility. Management is targeting completion by January 2028, alongside several Mumbai micro-tunnelling packages that are targeted for completion in FY27.

In rehabilitation, the Vadodara mega-drain project was nearing completion nearly one year ahead of schedule, according to management. The 15.5-kilometre Mumbai Storm Water Drain Rehabilitation project is also targeted for FY27 completion, while the Rs 24 crore Chandrabhaga River cleaning project is complete and has an operation-and-maintenance contract through June 2027.

Will tunnel-boring-machine restrictions affect Welspun Michigan?

Management said it does not expect Chinese restrictions on tunnel-boring-machine, or TBM, exports to affect Welspun Michigan’s ability to execute current or future projects. Patel said Welspun Michigan had not been purchasing Chinese TBMs and had instead sourced machines from Japan and Germany.

Patel cited supplier operations in Thailand and India, including German manufacturer Herrenknecht’s factory in Tamil Nadu, as sources for the machines required for the company’s tunnelling projects. This was management’s assessment of supply availability, and the call did not disclose the number of TBMs that Welspun Michigan owns, has ordered or expects to require.

The availability of TBMs is relevant to projects such as the 5.84-kilometre PST-1, which achieved breakthrough in October 2026, and the 4.6-kilometre PST-2, scheduled for January 2028 completion. Management’s stated sourcing approach is intended to support these schedules and future tunnelling bids.

How does Welspun Michigan’s goal compare with group guidance?

Welspun Michigan retained its medium-term ambition of about 15%-20% revenue growth and EBITDA margins above 20%, despite H1 FY27 revenue of Rs 318 crore. Management acknowledged that FY27 may temporarily fall short of its medium-term pace because of the first-half release timing, while maintaining that the full year should return to growth.

Welspun Enterprises reported consolidated H1 FY27 revenue of Rs 1,808 crore, up 11% year on year, and EBITDA of Rs 610 crore, up 53% year on year. Its EBITDA margin was 32.4%, compared with 23.9% in H1 FY26, but these group figures include businesses beyond Welspun Michigan and should not be treated as its standalone result.

At the group level, Welspun Enterprises expects Rs 8,000 crore to Rs 10,000 crore of order additions in FY27, mainly in H2. Management said water would be the principal source, with rehabilitation and tunnelling also expected, but it did not allocate a defined portion of those potential orders to Welspun Michigan.

Conclusion

Welspun Michigan attributes its H1 FY27 slowdown to delayed releases rather than lost contracts, with Rs 318 crore of revenue recorded in the first half. Its Rs 2,279 crore order book, including the Rs 995 crore DGT project, and Rs 450 crore of orders received to date provide the disclosed basis for management’s expectation of stronger H2 execution and its retained medium-term growth target.

The next milestones are the conversion of released work into H2 FY27 revenue, potential order additions of Rs 700 crore to Rs 1,200 crore, and progress on PST-1’s September 2027 completion target. Management also identified Rs 1,500 crore to Rs 1,800 crore of bids under pursuit, while PST-2 and the Mithi tunnel remain scheduled for January 2028 completion.