Welspun LivingQ2 FY25
Welspun Living Q2 FY25 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹190P/E: 65.2Market Cap: ₹18.1K CrSector: Textiles & Apparels
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
N/A
Order
N/A
Capex
Yes
1 of 3 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- →Welspun targets a top line of Rs. 15,000 crores by FY 2027, driven by capacity expansions.
- →New CAPEX of Rs. 709 crores planned for FY 26 and 27 for bed sheet and towel capacity increases.
- →Full utilization of new facilities expected by FY 2028, supporting revenue growth from then on.
- →Domestic flooring business grew 28% YoY; overall flooring expected to grow in double digits this year.
- →Emerging businesses (domestic consumer, global brands, advanced textiles, flooring) grew 22% YoY and expected to contribute ~45% of revenue by FY 27-28.
- →Global brands grew 58% in Q2, indicating robust international demand.
- →Domestic retail showed 10% growth in Q2, with upbeat festive season expectations.
- →Despite Red Sea shipping challenges, Welspun remains committed to achieving revenue and EBITDA guidance for FY 25.
Margin guidance
Category 3- →Company maintains full-year guidance of 10%-12% revenue growth and 15%-15.5% EBITDA margin for FY 2025.
- →EBITDA in Q2 grew 7.5% year-on-year and 7% quarter-on-quarter despite challenges.
- →PAT for H1 FY25 improved by 8% year-on-year; EPS stood at Rs. 4.03 compared to Rs. 3.7 last year, up 9%.
- →Flooring business expected to grow at double digits during the year.
- →Emerging businesses (domestic consumer, global brands, advanced textiles, flooring) grew 22% YoY, contributing ~33% of total revenue; targeted to grow to 45% revenue share by FY 27/28.
- →New CAPEX aimed at increasing capacity with full utilization by FY 28, supporting top-line growth to Rs. 15,000 crores by FY 27.
- →Net debt expected to reduce to zero to Rs. 200 crore by FY 28, supporting profitability.
- →Cautiously optimistic outlook with focus on sustainable and profitable growth.
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Fundraise plans
- →Current net debt stands at Rs. 1,832 crores as of Q2 FY25, up by Rs. 270 crores due to timing differences including Rs. 343 crores paid for share buyback.
- →Guidance indicates net debt is expected to be reduced to zero to Rs. 200 crores by FY28 after completion of ongoing CAPEX investments.
- →Additional CAPEX of Rs. 709 crores over FY26 and FY27 planned for capacity expansion; maintenance CAPEX of Rs. 150-200 crores also expected.
- →No explicit mention of new fundraising through equity or additional debt beyond current CAPEX and repayments.
- →The company aims for zero net debt by FY28, indicating reliance on internal accruals and existing borrowings rather than fresh major fundraising.
Order book
- →The transcript does not explicitly provide specific figures or details about the current or expected order book or pending orders.
- →However, it mentions increased buying activity from major U.S. retailers ahead of the holiday season, leading to higher capacity utilization (over 95%) in key product lines like terry towels and bed sheets.
- →The company has seen strong global brand growth (58% in the quarter) and increased order volumes contributing to a revenue growth of 16% year-on-year in Q2.
- →Despite challenges like Red Sea disruptions and container shortages, the company remains cautiously optimistic about gradual volume improvements in H2 FY25.
- →They are focused on maintaining and building sales through manufacturing and outsourcing to meet targets.
- →Flooring business and emerging segments are also adding to order momentum, with double-digit growth expected in flooring in the current year.
- →Overall, order intake appears robust with a positive outlook driven by strong retailer demand and expanding global brand reach.
Capex plans
Yes- →Current FY25 CAPEX: Rs. 800-850 crores, mainly for towel project at Anjar and pillow project in the U.S. (Rs. 492 crores spent till H1 FY25).
- →Additional approved CAPEX: Rs. 709 crores over FY26 and FY27 for:
- → - Bed linen processing capacity (increase to 4 lakh meters per day/144 million meters per annum).
- → - Coarse count spinning (40 metric tons per day for backward integration).
- → - Towel looms expansion (produce 3,600 metric tons per annum).
- →Total investment in Anjar thus Rs. 1,050 crores including prior Rs. 341 crores.
- →Full capacity utilization of new facilities expected by FY28.
- →Maintenance CAPEX of Rs. 150-200 crores anticipated after major investments.
- →Targeting zero to Rs. 200 crores net debt by FY28 post-CAPEX.
- →Strategic focus on increasing domestic market 5x over five years and global home textile market share aligned with China plus One strategy.
How does Welspun Living rank vs peers in Textiles & Apparels?
Pro feature1Welspun Living
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