Buy Welspun India; target of Rs 90: Sharekhan

Sharekhan's research report on Welspun India

Welspun India Limited (WIL) posted stellar performance in Q3FY2021 with revenues and PAT growing by 29% and 1.3x (with OPM expanding by 658 bps to 19.6%). Bed linen sales volumes grew 43%, bath linen grew 17% and rugs & carpets volume grew by 28%, highest sales volumes in the past several years. Business has improved starkly after a dull Q1FY2021 (affected by pandemic) and company is expected to clock revenues close to Rs. 7,300 crore in FY2021 and an OPM of 19-20%.

Outlook

Welspun expects to maintain double-digit revenue growth momentum over FY2021-23 on back of capacity expansion in core business and scale-up in emerging business. We recommend Buy on the stock with price target of Rs. 90.