Welspun India sees growth taking off in the second half of FY19

We are in the last phase of the September quarter earnings season, and the results announced by the BSE 500 companies so far have shown signs of a sharp recovery, as compared to the June quarter, when the economic activity in the country was compromised due to lockdown in various regions. From the BSE 500 list, 216 companies have announced their September quarter results so far. We excluded banking and financial companies.  Along with the index stocks we also analyse each sector quarterly earnings. (Data Source: ACE Equity)

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26 Aug, 2025 12:21

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After reporting double-digit revenue growth "after a long time", Welspun India now expects its growth rate to "take off" in the second half of the current financial year, a senior official at the company told Moneycontrol.

The Mumbai-based textile company saw its revenue in the second quarter increase by 10.29 percent to Rs 1,797.79 crore, from Rs 1,629.93 crore a year earlier.

"The growth rate will be higher in the second half. In the first two quarters we averaged growth of 6 percent. That will increase to 10 to 12 percent in the last two quarters," said Chief Financial Officer Altaf Jiwani.

The company's consolidated net profit rose 21.38 percent to Rs 121.69 crore in the September quarter.

"We see an uptick in the US retail sales and this is translating into higher volume growth for us," Welspun Group Chairman BK Goenka said in a statement earlier.

The company is a major exporter of home textiles to the US. It also owns the Christy's brand, and sells home textile products in India through multi-brand outlets.

Welspun India's EBITDA margin fell marginally in the second quarter to 17.1 percent from 18.8 percent a year ago; but sharply from the 20.6 percent the first quarter of the current fiscal year.

"That is mainly because, while our cost structure has got aligned with the new exchange rate, the topline hasn't," said Jiwani.

Most of the company's costs, including freight, raw materials and cotton are linked to currency and crude. While the costs have aligned with the new exchange rate, there is a lag when it comes to revenues because of hedging.

"We had a similar situation in 2013-14," he said.

Jiwani, however, remarked that the company's EBITDA margin will see a "substantial jump" in the next financial year. "We will have one of the record years in the 2020 financial year," he said.

The company has invested Rs 192 crore on its new flooring textile facility in Telangana in the first half of the year. The spend is part of its Rs 900 crore capex for the financial year.

The total investment outlay for the facility is Rs 1,100 crore, of which Rs 750 crore will be spent this year.

"We plan to commercially start operations in the facility by October-December 2019," said Jiwani. "It will give us an annual revenue of Rs 1,800 crore at peak capacity," he added.