Welspun India Q3 profit slumps 68% as inflation bites

The conglomerate’s earnings before interest, taxes, depreciation, and amortization(EBITDA) slumped 31%. (Representative image)

Home textiles manufacturer Welspun India reported a bigger-than-expected 68% slump in third-quarter profit on Monday as rising inflation pushed consumers to scale back spending on discretionary items.

The bedsheet-maker’s consolidated net profit fell to Rs 42.38 crore ($5.20 million) for the quarter that ended December 31 from Rs 132 crore a year earlier, Welspun India said in an exchange filing.

Analysts had, on average, expected a profit of Rs 60.95 crore, according to Refinitiv IBES data.

Textile manufacturers have been grappling with inflation as companies struggled to pass on rising input costs while consumers diverted their savings to essentials such as food and fuel.

”The global environment remained challenging during Q3 FY23 due to inflation and slowdown across our key markets,” the company said in a statement.

The conglomerate’s earnings before interest, taxes, depreciation, and amortization(EBITDA) slumped 31%.

The home textile business, which accounts for 94% of revenue, reported a 22% fall in revenue, while EBITDA margins for the segment contracted to 11.7%.

Overall revenue dropped nearly 23% to Rs 1,869 crore.

Separately on Monday, the company said it entered a brand licensing partnership with The Walt Disney Company to expand its global brand portfolio.

($1 = 81.5630 Indian rupees)