Welspun Living Q1 Results Review - Inline Revenue, Soft Margins Lead To Ebitda Miss: Systematix

Systematix Report

Welspun Living Ltd. reported broadly in line revenue of Rs 25.4 billion, registering strong 16% YoY growth (down 1.5% QoQ), primarily through increased volumes and exports. The company delivered strong performance in the home textiles segment, while the flooring segment remained subdued.

Gross margin contracted 74 basis points YoY and 4 bps QoQ to 46.4%, slightly lower than our estimate of 47%. Ebitda margin contracted 76 bps YoY and 46 bps QoQ to 13.5% versus our estimate of 14.5%. Ebitda was up 10% YoY (down 5% QoQ) to Rs 3.4 billion (missed estimate by 6%).

Exports were healthy at 20% YoY, despite challenges like the Red Sea issue, container shortages and mixed global macroeconomic conditions. Innovation Business grew 13% YoY to Rs 6.4 billion, contributing 28% to overall revenue.

The domestic consumer business was resilient at a modest 3% YoY revenue growth of Rs 1.2 billion, amid the challenging demand scenario in India’s retail market. Emerging businesses (comprising domestic consumer business, global brands, advanced textiles and flooring) grew at 7% YoY to contribute 30% to overall revenue.

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