Welspun Living (WELSPUNLIV) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 saw a challenging environment with persistent U.S. tariff headwinds, muted discretionary demand, and cautious retailer buying, resulting in a 9.9% year-on-year revenue decline, but sequential EBITDA margin improvement to 7.7% due to cost discipline and operational efficiencies.

• Domestic business grew 4.7% year-on-year, driven by brand strength and momentum in flooring and institutional channels.

• Landmark FTAs with the U.S., EU, UK, Japan, and Australia have structurally improved India's global market access and tariff competitiveness, positioning the company for future growth.

• The company continues to focus on cost control, mix improvement, cash generation, and selective growth investments.

• Achieved No. 1 global ranking in S&P Global Corporate Sustainability Assessment 2025 for Textile, Apparel & Luxury Goods.

Financial highlights

• Q3 FY26 consolidated revenue was ₹2,277 crore, down 9.9% year-on-year; EBITDA was ₹175 crore with a margin of 7.7%, down 493 bps YoY but up sequentially.

• Profit after tax before exceptional items stood at ₹21.5 crore, while PAT after minorities was ₹0.2 crore, down 99.9% YoY.

• Free cash flow improved to ₹395 crore from ₹112 crore in FY25, with a cash conversion cycle of 88 days.

• Net debt reduced to ₹1,332 crore as of December 2025, down by ₹238 crore from September 2025 and by ₹326 crore year-on-year.

• CapEx for Q3 FY26 was ₹139 crore, focused on productivity and sustainability.

Outlook and guidance

• Gradual recovery in volumes expected as FTAs restore competitiveness, with margin normalization anticipated from Q1 FY27 onward.

• Domestic business targeted to grow over 20-25% in the next financial year, driven by GST reforms and brand strength.

• Management expects improved demand visibility and long-term opportunities for the textile sector as new trade agreements enhance India's competitiveness.

• CapEx will focus on productivity, sustainability, and selective growth, with no immediate plans for additional capacity beyond current projects.