Any current/future new fundraising through debt or equity?

No specific mention of any new fundraising through debt or equity in the current quarter or near future. The company is funding the dividend and buyback (up to Rs. 278 crore) entirely through internal resources and free cash flows. Net debt has reduced from Rs. 2,333 crores in FY21 to Rs. 1,354 crores by end of FY24, despite dividend and buyback outflows. For FY25, expected CAPEX is Rs. 860 crores, funded internally. FY26 CAPEX projected at Rs. 300-400 crores, with no additional funding guidance given yet. Management highlighted focus on reducing net debt and maintaining financial discipline w

Any current/future capex/capital investment/strategic investment?

Q1 FY25 CAPEX was Rs. 206 crores, mainly towards towel project at Anjar and pillow project in the US. For FY25, total CAPEX guidance is Rs. 860 crores, including: - Anjar towel project - Pillow project in the US - Rs. 75 crores for transmission line for renewable energy - Maintenance CAPEX FY26 CAPEX is expected between Rs. 300 to 400 crores, details not yet finalized. Plans to expand flooring capacity from 18 million sq. meters to 27 million sq. meters when utilization surpasses 18 million. Renewable energy initiatives include setting up 18 MW solar plant at Vapi to meet ~30% of power

Future growth expectations in sales/revenue/volumes?

Welspun Living Limited expects to achieve 12%-15%+ top-line growth in FY '25, with a 17% YoY growth already reported in Q1 FY '25. Export markets, especially the US, are anticipated to continue growing positively, buoyed by retailers like Walmart and Target showing a positive outlook. Domestic consumer business growth is expected to pick up post the festive season with expansion into new categories and channels. Flooring business is projected to grow at a 20%-25% CAGR over the next 3-4 years, with capacity utilization targeted above 80% by FY '27. Emerging businesses (domestic consumer, global

Future growth expectations in earnings/operating earnings/profits/EPS?

Welspun Living expects good margin improvement of 200 bps plus over the next two years driven by competitive power costs from FY ‘26-’27 onward (Page 13). The company aims for EBITDA margins in the range of 16%-18% over the next couple of years as emerging businesses gain momentum (Page 12). Domestic flooring business targets 20%+ CAGR growth over next 3-4 years, achieving 15%-16% EBITDA margins at 80%+ capacity utilization by FY ‘27 (Page 11). For FY ‘25, EBITDA margin guidance is 15%-15.5%, with expectation of margin expansion as volume grows (Pages 10, 12). EPS for Q1 FY ‘25 was Rs. 1.93 co

Current/ Expected Orderbook/ Pending Orders?

The transcript does not provide explicit details on the current or expected order book or pending orders figures. However, from the Q&A session on Page 6, Rajvee from JM Financial asked about order book and demand outlook in the US market for H2 FY25. Dipali Goenka responded that demand remains good as seen in Q1 with good visibility, especially as the US prepares for the holiday season. The company is cautiously optimistic about the demand and has committed to around 12% growth for FY25, expecting to exceed it as they proceed. No exact numbers on order book or pending orders were shared publi

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Welspun Living LtdQ2 FY24Textiles & Apparels

Welspun Living Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹139P/E: 53.1Market Cap: ₹12.4K CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

N/A

Order

N/A

Capex

Yes

2 of 3 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Welspun Living Limited expects to achieve 12%-15%+ top-line growth in FY '25, with a 17% YoY growth already reported in Q1 FY '25.
→Export markets, especially the US, are anticipated to continue growing positively, buoyed by retailers like Walmart and Target showing a positive outlook.
→Domestic consumer business growth is expected to pick up post the festive season with expansion into new categories and channels.
→Flooring business is projected to grow at a 20%-25% CAGR over the next 3-4 years, with capacity utilization targeted above 80% by FY '27.
→Emerging businesses (domestic consumer, global brands, advanced textile, and flooring) grew 7% YoY in Q1 FY '25 and contribute about 30% of total revenues; steady growth across these areas is expected.
→Capacity expansions, including towel and pillow projects, and renewable energy initiatives, are underway to support volume growth.

Margin guidance

Category 1

→Welspun Living expects good margin improvement of 200 bps plus over the next two years driven by competitive power costs from FY ‘26-’27 onward (Page 13).
→The company aims for EBITDA margins in the range of 16%-18% over the next couple of years as emerging businesses gain momentum (Page 12).
→Domestic flooring business targets 20%+ CAGR growth over next 3-4 years, achieving 15%-16% EBITDA margins at 80%+ capacity utilization by FY ‘27 (Page 11).
→For FY ‘25, EBITDA margin guidance is 15%-15.5%, with expectation of margin expansion as volume grows (Pages 10, 12).
→EPS for Q1 FY ‘25 was Rs. 1.93 compared to Rs. 1.66 in Q1 FY ‘24, showing 15% YoY growth and 27% up QoQ (Page 5).
→Overall, the company is confident of sustaining top-line and bottom-line growth with improved ROCE and ROE, creating value for investors (Page 13).

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Fundraise plans

→No specific mention of any new fundraising through debt or equity in the current quarter or near future.
→The company is funding the dividend and buyback (up to Rs. 278 crore) entirely through internal resources and free cash flows.
→Net debt has reduced from Rs. 2,333 crores in FY21 to Rs. 1,354 crores by end of FY24, despite dividend and buyback outflows.
→For FY25, expected CAPEX is Rs. 860 crores, funded internally.
→FY26 CAPEX projected at Rs. 300-400 crores, with no additional funding guidance given yet.
→Management highlighted focus on reducing net debt and maintaining financial discipline without raising new debt or equity at present.

Order book

→The transcript does not provide explicit details on the current or expected order book or pending orders figures.
→However, from the Q&A session on Page 6, Rajvee from JM Financial asked about order book and demand outlook in the US market for H2 FY25.
→Dipali Goenka responded that demand remains good as seen in Q1 with good visibility, especially as the US prepares for the holiday season.
→The company is cautiously optimistic about the demand and has committed to around 12% growth for FY25, expecting to exceed it as they proceed.
→No exact numbers on order book or pending orders were shared publicly in this call.
→The overall positive demand outlook implies a healthy order book with steady growth expected in the second half of FY25.

Capex plans

Yes

→Q1 FY25 CAPEX was Rs. 206 crores, mainly towards towel project at Anjar and pillow project in the US.
→For FY25, total CAPEX guidance is Rs. 860 crores, including:
→ - Anjar towel project
→ - Pillow project in the US
→ - Rs. 75 crores for transmission line for renewable energy
→ - Maintenance CAPEX
→FY26 CAPEX is expected between Rs. 300 to 400 crores, details not yet finalized.
→Plans to expand flooring capacity from 18 million sq. meters to 27 million sq. meters when utilization surpasses 18 million.
→Renewable energy initiatives include setting up 18 MW solar plant at Vapi to meet ~30% of power requirements.
→Jacquard towel expansion (6,400 tons) plant expected to be operational by August-September 2024.

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