Sharekhan's research report on Welspun India
Welspun India Limited’s (WIL’s) Q2FY2024 numbers beat ours and the street’s expectation on better-than-expected revenue growth at ~19%, while EBIDTA margin expanded by 819 bps y-o-y to 14.3%, resulting in PAT coming at Rs. 200 crore. Capacity utilisation of bed linen, bath linen, rugs and carpet segments stood at around 80-100%. Management is optimistic about H2 on improved demand from US retailers. Flooring business is getting good demand from the US market due to the China +1 factor. Management has maintained its conservative guidance of 12% revenue growth and EBIDTA margins of 15% in wake of global uncertainties reeling around Israel conflict.
Outlook
Since we upgraded the stock to Buy, the stock has moved up by 22% in the past three months. We maintain a Buy rating on the stock with a revised PT of Rs. 163. Stock trades at 23x/18x its FY2024E/25E earnings.
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