Welspun Living (WELSPUNLIV) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue declined 11.6% YoY to ₹2,289 crore, impacted by global trade uncertainties, tariff headwinds, and cautious retailer behavior, while domestic business grew 9.5% YoY, led by consumer and flooring segments.

• EBITDA margin dropped to 11.1%, down 409 bps YoY, reflecting operating deleverage and lower volumes.

• Strategic focus on product diversification, innovation, and expanding presence in non-U.S. markets, with non-U.S. revenue share rising to 40%.

• Investments in U.S. pillow manufacturing, including a new Nevada facility with $13 million capex, aim to double pillow revenues and strengthen U.S. market positioning.

• Continued emphasis on cost optimization, operational agility, and ESG initiatives, targeting 100% renewable energy and sustainable cotton by 2030.

Financial highlights

• Consolidated revenue declined 11.6% YoY to ₹2,289 crore, mainly due to export softness and tariff-related uncertainty.

• EBITDA for Q1 FY26 was ₹254 crore, margin at 11.1%; PAT after minorities was ₹88 crore, down 52.8% YoY; EPS at ₹0.92, down from ₹1.93 YoY.

• Net debt reduced to ₹1,401 crore from ₹1,562 crore YoY, with improved cash conversion cycle.

• Capex of ₹83 crore incurred in Q1; board approved additional $13 million (₹112 crore) for Nevada pillow facility.

• EBITDA for the quarter was ₹2,543 million, a 35.4% YoY decline.

Outlook and guidance

• Near-term outlook remains cautious with continued pressure on top and bottom lines due to ongoing tariff and trade policy uncertainties.

• Focus remains on cost management, operational agility, and customer alignment to navigate headwinds.

• Net debt target for FY26 set at ₹1,300–1,400 crore, with a goal of zero net debt by FY28.

• Nevada pillow plant expected operational by January 2026, with significant revenue contribution at full capacity.

• Anticipates better performance in Q2 compared to Q1, with festive season exports expected to improve sequentially.