Welspun Living (WELSPUNLIV) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue reached ₹25,885 mn (INR 2,588 crore), up 17% year-over-year, with EBITDA of ₹3,935 mn (INR 393 crore) at a 15.2% margin and PAT of ₹1,855 mn (INR 186 crore), up 15% year-over-year.

• Home Textile exports grew 19% YoY, outperforming the industry, while the Flooring business posted revenue of ₹2,278 mn with a 9.2% EBITDA margin.

• Domestic business remained flat due to muted retail demand, but brand reach and recall improved, expanding to over 21,000 stores and 39 EBOs.

• Strong ESG focus, joining Reuters Vision 2045 Campaign, World Economic Forum's Alliance of CEO Climate Leaders, and receiving multiple ESG awards.

• Board approved equity buyback of up to ₹2,784 mn (INR 278 crore) at ₹220 per share; promoters to participate fully.

Financial highlights

• Q1 FY25 consolidated revenue: ₹25,885 mn (+16.9% YoY); EBITDA: ₹3,935 mn (+15% YoY, margin 15.2%); PAT: ₹1,855 mn (+14.8% YoY); EPS: ₹1.93 vs ₹1.66 in Q1 FY24.

• Net debt at ₹15,620 mn (INR 1,562 crore), down ₹2,533 mn YoY but up ₹2,078 mn sequentially due to capex and working capital.

• ROCE stood at 14.1%; ROE at 15.3%.

• Net debt to EBITDA improved due to ongoing debt reduction.

• Dividend of 10% approved for FY24; total outflow for buyback and dividend is ₹3,530 mn (INR 353 crore).

Outlook and guidance

• Maintains FY25 guidance of 12% revenue growth and EBITDA margin of 15%-15.5%.

• Flooring business expected to grow 20%-25% in FY25.

• Capacity expansions underway: Jacquard towel facility operational Nov 2024, new pillow facility in Ohio by Sep 2024.

• Management expects continued growth in exports and emerging businesses, with a focus on innovation and sustainability.

• Cautiously optimistic due to global economic and geopolitical uncertainties, but confident in achieving targets.