Welspun Living Limited

Welspun Living reported a consolidated revenue of INR2,456 crores for Q2 FY26, marking a 16.4% year-on-year decline but a 7.3% sequential growth. The EBITDA margin contracted significantly by 748 basis points Y-o-Y to 6.8%, primarily due to tariff-led volume pressure and an adverse product mix. Profit after tax after minority interest stood at INR13 crores, representing a substantial 93.5% Y-o-Y decrease. Despite these challenges, the company improved its cash convertible cycling to 88 days, the lowest since FY '22, and reduced net debt by INR33 crores to INR1,570 crores.

The 50% tariff on Indian exports to the U.S. has significantly disrupted trade flows and retailer buying patterns, impacting near-term volumes. While overall U.S. exports of towels declined by 44% and sheets by 8% from January to July 2025, Welspun claims to have maintained its market share. Consumer sentiment in the U.S., the largest market, remains muted, with holiday spending on home categories projected to decline 20-25%, indicating continued demand cautiousness. Management confirmed that the tariff impact^🌐 was mainly on volume and realizations, with partial absorption of tariffs shared with customers.

Welspun is actively diversifying its footprint across the U.K., Europe, GCC, ANZ, and Japan to mitigate U.S. market volatility^🌐. The company's dispatches to the EU grew over 2x the market rate between January and July 2025. The luxury brand Christy demonstrated strong global growth of over 40% Y-o-Y, with its online segment growing over 30% and achieving 50% gross margins. Strategic onshore investments, such as the Ohio Pillow facility, are nearing 50% utilization, with the Nevada expansion expected to be operational by February 1st, aiming to nearly double the pillow business to ~$30 million this year.

The domestic consumer business recorded INR153 crores, a 3.7% Y-o-Y decline, attributed to short-term channel adjustments for GST rate rationalization. However, the company anticipates a 20% growth and breakeven EBITDA for its domestic brands (Spaces and Welspun) over the next two years, with INR1,000 crores intact. The flooring segment faced a 27% Y-o-Y degrowth, clocking INR181 crores, due to subdued housing activities in the U.S. Conversely, the soft flooring category is expected to grow over 20%, and the company is capping hard flooring capacity to ensure efficient and profitable operations.

The company spent INR87 crores on Capex this quarter, primarily for efficiency enhancement and green energy projects, including a shift to 80% renewable energy adoption at the Anjar facility. Management emphasized disciplined execution and sustainable growth, with a focus on cost realization, operational efficiencies through automation, and market diversification. While near-term pressure^📎s are expected to continue into H2 FY26, Welspun aims to maintain its market leadership and achieve home textile EBITDA margins of 15-16% in the long term, viewing current headwinds as a catalyst for building a stronger foundation.

The Board approved the appointment of Mr. Manish Bansal as the new Chief Financial Officer of Welspun Living Limited, effective January 1, 2026. Mr. Bansal has been with the Welspun Group for over 15 years, holding leadership roles across Indian retail, U.K., and U.S. businesses. His extensive experience is expected to be instrumental in driving cost realization and improving operational efficiencies as the company navigates the current challenging environment.