Home textile major Welspun Living is on track to achieve its Ebitda guidance of around 15% despite a higher working capital requirement due to the current geopolitical conditions, said Managing Director and Chief Executive Officer Dipali Goenka.
The Mumbai-headquartered textile manufacturing company reported a marginal increase in its consolidated net profit for the second quarter of the current financial year at Rs 201 crore compared to Rs 196.7 crore a year ago.
Total income for the period under review stood at Rs 2,936 crore, a rise of 15.5% from Rs 2,542.4 crore crore in the second quarter of the preceding fiscal.
Welspun Living's Ebitda for the second quarter of FY2024–25 stood at Rs 420.6 crore, reflecting a year-on-year rise of 7.5% from Rs 391.3 crore in the corresponding quarter a year ago.
Pointing out that the second quarter in the ongoing financial year was among the best ever for the company, Goenka told NDTV Profit, "We recorded one of the highest quarters. Yes, Ebitda has been a little soft, although in absolute terms, we have grown by 7% year-on-year as well. The challenges were because of the geopolitical issues. Let me be very clear here. The Red Sea has been impacting us because it's a long route and we were shipping out for the holiday season. We were completely time-bound."
She emphasised that despite the challenges, the company is on track to achieve its earlier announced Ebitda guidance. "We will maintain guidance around 10–12% in terms of a top line and 15–15.5% in Ebitda. Let me also just say that our strategy remains intact. The geopolitical issues will continue," she added.
The CEO highlighted that the Rs 350-crore capex that the company announced last year on jacquard towels and fashion tiles is now inching towards completion. Coupled with this year's Rs 750 crore, the number has now moved up to Rs 1,050 crore.
"We are looking at around 1,00,000 metres of bedding processing along with the cut and sow. So when we talk about towels, we are integrating backwards in terms of setting up 24 looms and a spinning yarn (that) will completely make us integrated. This will help us not only to integrate facilities but also improve our turnaround time and ability to react faster to our customer needs," she added.
Goenka emphasised that the company will maintain its current return on capital of around 15.5% despite the proposed capital expenditures.
Shares of Welspun Living Ltd. closed 0.99% lower at Rs 149 apiece on the NSE against 0.52% gain in benchmark Nifty 50.
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