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    Welspun Living Q4 FY25 earnings call

    WELSPUNLIVMixed
    Textiles·29 May 2025
    Management Summary

    Welspun Living reported a resilient Q4 FY25 amidst a challenging global environment marked by tariff uncertainties and shifting trade dynamics. While consolidated revenue grew modestly in Q4, the full year saw robust growth driven by Home Textiles and emerging businesses. The company emphasized its strategic diversification, strong customer relationships, and sustainability efforts, though it withheld specific FY26 guidance due to prevailing market volatility.

    Highlights

    8

    • Consolidated revenue for FY25 reached INR10,697 crores, marking an 8.9% year-on-year growth.

    • Q4 FY25 consolidated revenue stood at INR2,648 crores, up 1.2% year-on-year.

    • EBITDA margin for FY25 was 13.6%, while Q4 FY25 EBITDA margin was 12% (INR318 crores), down 20.5% year-on-year.

    • Profit after tax for FY25 was INR639 crores, down from INR681 crores in FY24.

    • Home Textile exports grew 10.8% in FY25, and the domestic retail business grew over 5% to INR605 crores.

    • Domestic flooring segment saw 12% growth in FY25, reaching INR162 crores.

    • Advanced Textiles business clocked INR562 crores, growing 7.8% in FY25.

    • The company proposed a 170% dividend distribution for FY25, amounting to INR163 crores (25% of PAT).

    Concerns

    2

    • Global trade dynamics and tariff uncertainties (US tariffs)

    • Near-term market volatility and lack of FY26 guidance

    What Changed1

    vs Q1 FY26

    Risks discussed5 → 4 (-1)
    Key financials

    Metrics

    8

    Periods

    2

    Headline

    6
    • Consolidated Revenue
      ₹2,648 Cr
      YoY+1.2%
    • EBITDA
      ₹318 Cr
      YoY-20.5%
    • EBITDA Margin
      12%
    • PAT
      ₹132 Cr
      YoY-9.6%
    • EPS
      ₹1.4
      YoY-7.9%

    FY25

    2
    • Consolidated Revenue
      ₹10,697 Cr
      YoY+8.9%
    • Capex
      ₹701 Cr

    Segment breakdown

    • Home Textile (Core Business)₹8,804 Cr85.9%
    • Flooring₹889 Cr8.7%
    • Advanced Textiles₹562 Cr5.5%
    Donut· Share of Revenue (FY25)

    Guidance & targets

    12
    CategoryTargetPriority
    Revenue
    Pillow Business Revenue
    nearly double
    		Medium
    Revenue
    Domestic Market Growth
    30%
    		High
    Revenue
    Domestic Branded Segment Revenue
    INR1,200 crores
    		Medium
    Revenue
    North Star Revenue
    INR15,000 crores
    		High
    Capex
    Total Capital Outlay
    INR1050 crores
    		High
    Capex
    Further Spend for FY26
    INR200 crores
    		High
    Capex
    Maintenance Capex
    INR100 crores
    		High
    Capex
    Total Expected Capex
    INR300 crores
    		High
    Capacity
    Additional Terry Towels Capacity
    6,400 metric ton
    		High
    Capacity
    Total Terry Towel Capacity
    1 lakh metric ton per annum
    		High
    Profitability
    North Star EBITDA Margin
    15-16%
    		High
    Tax
    Effective Tax Rate (ETR)
    25%
    		High

    Risks & concerns

    5
    RiskSeverity

    Global trade dynamics and tariff uncertainties (US tariffs)

    Recent developments around reciprocal tariffs, especially from the U.S., have introduced short-term unpredictability into trade flows, impacting Q4 order patterns and leading to cautious inventory management. — Management acknowledged

    high

    Near-term market volatility and lack of FY26 guidance

    Management expects near-term volatility to persist and explicitly stated inability to provide firm guidance for FY26 due to the dynamic external environment. — Management acknowledged

    high

    Raw material cost inflation (cotton)

    Cotton prices are expected to increase by 7-8% to around INR62,000 per candy due to MSP, though the company has coverage until September. — Management acknowledged

    medium

    Red Sea challenges

    Red Sea challenges impacted the Flooring business in Q3, though the impact seems to have lessened in Q4. — Management acknowledged

    low

    Areas of Evasion(1)

    • Specific FY26 financial guidance

    Q&A highlights

    3

    “So the margins actually, as I spoke about it earlier as well, we just grew by 2%. And we couldn't ship some inventory because it was held up due to the tariff uncertainty in the Home Textile.”

    Addressed the reason for Q4 margin compression and the direct impact of tariff uncertainty on shipments.

    asked by Prerna Jhunjhunwala

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 FY25 Performance and Full-Year Highlights

    Welspun Living reported a consolidated revenue of INR2,648 crores for Q4 FY25, a modest 1.2% year-on-year growth. For the full fiscal year 2025, consolidated revenue reached INR10,697 crores, growing 8.9% YoY. EBITDA margin for Q4 FY25 was 12% (INR318 crores), down 20.5% YoY, primarily due to lower offtake ahead of tariff implementations. Full-year EBITDA margin stood at 13.6%, with PAT at INR639 crores, a decline from INR681 crores in FY24.

    02

    Strategic Diversification and Global Market Focus

    The company has significantly diversified its revenue mix, with the US share now at 60-65% compared to 80% a few years ago, and non-US markets (UK, EU, GCC, ANZ, Japan) contributing 30-35%. Non-US exports grew 30-35% in Q4 FY25. The India-UK free-trade agreement is seen as a pivotal opportunity, expected to provide a level playing field and boost market share in towels, sheets, bath rugs, and flooring solutions in the UK and Europe.

    03

    Domestic Business Growth and Brand Strength

    Welspun Living's domestic retail business grew over 5% in FY25 to INR605 crores, with the Welspun brand itself growing 10%. The e-commerce segment witnessed significant traction, growing 100% in FY25. The company is poised for 30% growth in the domestic market this year and aims for its branded segment to reach INR1,200 crores in the next two years, reinforcing its leadership in the Indian home solutions space.

    04

    Capacity Expansion and Capex Plans

    The company has approved a total capital outlay of INR1050 crores in Anjar for various expansions over FY25-FY27. This includes an additional 6,400 metric tons of terry towel capacity nearing completion. For FY26, a further spend of INR200 crores is planned to increase terry towel loom capacity by 3,600 metric tons and expand Cut & Sew and bed sheet storage, bringing total expected capex for FY26 to INR300 crores, including INR100 crores for maintenance.

    05

    Tariff Challenges and Raw Material Outlook

    The company acknowledged short-term unpredictability due to US tariff uncertainties, which led to cautious order patterns in Q4 and impacted margins. While a 90-day pause offers some relief, volatility is expected to persist. On raw materials, cotton prices are projected to increase by 7-8% to INR62,000 per candy due to MSP, but Welspun Living has forward coverage until September, mitigating immediate impact.

    06

    Long-Term Vision and Sustainability

    Welspun Living reiterated its long-term 'North Star' target of INR15,000 crores in revenue with a 15-16% EBITDA margin by FY27-FY28. The company achieved a strong ESG score of 83 in 2024, ranking highest among Indian textile manufacturers and fourth globally in its category. It remains committed to 100% renewable energy and 100% sustainable cotton by 2030, embedding sustainability across its value chain.

    This is an AI-generated summary of a publicly available earnings call transcript.