Sharekhan's research report on Welspun India
Welspun India Limited (WIL) registered strong all-round performance on the back of strong international demand and low base of Q1FY2021. Revenue and operating profit grew by 84%/100% y-o-y, respectively, in Q1FY2022; PAT grew by 4.1x. Home textile business revenue grew by 51% y-o-y, driven by sturdy volume growth of 51%, 114%, and 219% in bath linen, bed linen, and rugs and carpet segments, respectively. Management targets strong double-digit revenue growth in FY2022, driven by sustained good demand for home textile products in the US market and scale up in the advance textile, flooring, and branded business. OPM is likely to stand at 20-21% (RoSCTL benefit of 4% on OPM).
We have revised upwards our earnings estimates for FY2022/FY2023 by 5.6%/8.9%, respectively. The stock is trading at 14.0x its FY2023E EPS. We maintain Buy with a revised PT of Rs. 170.
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