Welspun Living Ltd. (WLL) is a leading home textiles company operating in over 60 countries. It focuses on Home Textiles, Advanced Textiles, and Flooring Solutions, supplying global retailers from facilities in Anjar and Vapi, Gujarat. WLL offers products like towels, bed sheets, and rugs, with a strong domestic presence in over 500 towns and 20,000 retail outlets. It serves mass-market segments through “Welspun” and premium segments via “Spaces” brands.
• In 9MFY25, consolidated revenue rose 12% YoY to Rs.8,049cr. EBITDA grew 2% YoY to Rs.1,133cr while EBITDA margin de-grew 139bps to 14.1%, driven by higher freight costs. PAT fell 5% YoY to Rs.507cr in the same period.
• The company is entering the pillow market, the second-largest home textile category. WLL’s new plant in Ohio, USA, will start operations in H2FY25.
• The company aims to enhance its B2C presence, increasing multi-brand outlets (MBOs) to 50,000 from the current 20,282 and 400 exclusive brand outlets (EBOs) from 32 now by FY27.
• The company is on track to achieve its FY27 goal of reaching Rs.15,000cr by sustaining market leadership and profitability in its core business, while also expanding its emerging business segments.
• As per market consensus, revenue and PAT are expected to grow 12% CAGR each, respectively, in FY24- FY26E. Currently, the stock is trading at a 1-year forward P/E ratio of 15x with a healthy RoE of 16%.
Technical Analysis
• The stock has experienced a correction of ~51% since reaching its recent high in August 2024. However, it is now exhibiting signs of a trend reversal from strong support, supported by increasing buying strength and an improving price structure along with higher volume.
• The momentum indicator RSI is improving and currently placed at 57 signals recovery from oversold levels, along with positive cross over on MACD.
• A sustained breakout above the 50- DMA would strengthen the bullish momentum, potentially driving the price toward the 100-DMA and the 38.2% Fibonacci retracement level of the recent decline. Further upward movement could see the stock testing the 200-DMA at Rs.157, reinforcing a long-term recovery trend.
