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Buy Welspun India: target of Rs 170: Sharekhan

Sharekhan is bullish on Welspun India has recommended buy rating on the stock with a target price of Rs 170 in its research report dated July 28, 2021.

July 29, 2021 / 05:02 PM IST
 
 
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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).



Outlook


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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first published: Jul 29, 2021 05:02 pm
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