Welspun Living (WELSPUNLIV) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue grew 17% year-on-year to ₹25,885 mn, with EBITDA of ₹3,935 mn at a 15.2% margin and PAT of ₹1,855 mn, up 15% year-on-year.

• All business segments contributed to growth, especially exports and innovation-driven products, with home textile exports up 19% year-on-year.

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

• Flooring business delivered highest EBITDA margin of 9.2% and continued capacity utilization improvements.

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

Financial highlights

• Q1 FY25 consolidated revenue: ₹25,885 mn (+17% YoY); EBITDA: ₹3,935 mn (+15% YoY, margin 15.2%); PAT: ₹1,855 mn (+15% YoY); EPS: ₹1.93 vs ₹1.66 in Q1 FY24.

• Net debt at ₹15,620 mn as of June 30, 2024, down ₹2,533 mn YoY but up ₹2,078 mn sequentially due to capex and working capital.

• Net debt/EBITDA remains comfortable; Net Debt/Equity: 0.33; Net Debt/EBITDA: 1.00; Current ratio: 1.62.

• ROE: 15.3%; ROCE: 14.1% (TTM); Inventory days: 84; Debtor days: 54; Cash conversion cycle: 97 days.

• CapEx guidance for FY25: ₹8,600 mn; Q1 FY25 capex of ₹2,067 mn focused on towel and pillow projects.

Outlook and guidance

• Management maintains 12% revenue growth and 15%-15.5% EBITDA margin guidance for FY25.

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

• Flooring business expected to grow 20%-25% in FY25; domestic flooring grew 15% year-on-year in Q1.

• Focus on innovation, sustainability, and increased market penetration in beach/fashion towels and US pillow market.

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