At a Glance
Welspun Living, the towel-to-bedsheet kingpin of the $2.7B Welspun Group, just delivered Q1 FY26 results that screamed: soft, like their products. Revenue fell 11% YoY to ₹2,261 Cr, while PAT halved to ₹89 Cr. Stock at ₹133 is already absorbing the fluff of its brand names like Spaces and Christy, but earnings aren’t keeping up. Nevada pillow plant coming soon – because why not add a side quest when margins are leaking?
Introduction
When your business is home textiles and your profits look like torn pillow stuffing, you know it’s been a rough quarter. Welspun Living, famed for supplying linens to luxury hotels (and maybe your guest room), faced revenue decline and profit pressure. Global headwinds, raw material costs, and weakening demand are hitting harder than an un-ironed bedsheet.
Business Model (WTF Do They Even Do?)
- Core Business:
- Home Textiles (92% of revenue): towels, sheets, rugs, upholstery.
- Technical textiles & flooring – small but growing.
- Brands: Christy, Spaces, Martha Stewart, Disney Home.
- Roast: Heavy branding but slow growth; competing in a cutthroat segment where margins vanish faster than hotel soaps.
Financials Overview
Q1 FY26
- Revenue: ₹2,261 Cr (↓11% YoY)
- Operating Profit: ₹225 Cr
- OPM: 10% (vs 12% YoY)
- PAT: ₹89 Cr (↓53% YoY)
- EPS: ₹0.90
FY25
- Revenue: ₹10,545 Cr
- PAT: ₹644 Cr
- ROE: 13.7%
Comment: Revenue slump + margin compression = profit nosedive.
Valuation
- P/E Method
- EPS TTM: ₹5.57
- Sector P/E: 20x
- Value ≈ ₹110
- Book Value
- BV: ₹49.6
- CMP/BV: 2.68x
- Value ≈ ₹100
- EV/EBITDA
- EBITDA TTM: ₹1,179 Cr
- Multiple: 8x
- Value ≈ ₹150
🎯 Fair Value Range: ₹100 – ₹150
CMP ₹133 → fairly valued, some downside risk.
What’s Cooking – News, Triggers, Drama
- Nevada Pillow Plant: $13M capex, operational by Jan 2026 – could open new markets.
- Sustainability Push: Focus on eco-friendly textiles.
- Risk: Weak export demand, volatile cotton prices.
- Trigger: Margin recovery if raw material costs ease.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 10,307 |
| Liabilities | 5,582 |
| Net Worth | 4,821 |
| Borrowings | 2,762 |
Remark: Solid balance sheet but debt creeping back.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 756 | 533 | 688 |
| Investing | 244 | -210 | 57 |
| Financing | -1,086 | -269 | -663 |
Remark: Healthy operating cash, but financing outflows show high repayments.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 13.7% |
| ROCE | 14.4% |
| P/E | 23.9x |
| PAT Margin | 5.3% |
| D/E | 0.57 |
Remark: Valuation stretched, returns moderate.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 8,094 | 9,679 | 10,545 |
| EBITDA | 753 | 1,369 | 1,298 |
| PAT | 203 | 673 | 644 |
Remark: FY24 was peak, FY25 saw slight profit dip, FY26 Q1 signals more pain.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Welspun Living | 10,269 | 547 | 24x |
| KPR Mill | 6,388 | 797 | 50x |
| Trident | 6,951 | 436 | 36x |
| Vardhman Textiles | 9,861 | 852 | 15x |
Remark: Valuation middle-of-the-pack, profitability lower than peers.
Miscellaneous – Shareholding, Promoters
- Promoters: 66.2% (↓ from 70.5% in 2023)
- FIIs: 4.75%
- DIIs: 9.2%
- Public: 19.4%
Observation: Promoter stake falling, public share rising – not always a good sign.
EduInvesting Verdict™
Welspun Living is a textile giant with brand strength but facing profitability pressure. Export reliance, raw material volatility, and weak Q1 earnings dim near-term prospects. Nevada expansion is a wildcard.
SWOT Quickie
- Strengths: Global brand, strong balance sheet, product diversification.
- Weaknesses: Margin volatility, promoter stake drop.
- Opportunities: US expansion, sustainability focus.
- Threats: Currency swings, raw material costs, demand slump.
Final Word: Good company, bad quarter. Recovery depends on margin play.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Welspun Living Q1 FY26 Results, Welspun Textiles Analysis, Home Textile Industry India
