A leading textile stock surged 7 percent in today’s trading session after global brokerage firm Jefferies projected a potential upside of 32 percent. The upbeat outlook has sparked renewed investor interest, driving strong buying activity on the counter.
During Thursday’s trading session, shares of Welspun Living Ltd reached an intra-day high of Rs.143.25 apiece, rising 6.97 percent from its previous closing price of Rs.133.91 apiece. However, the stock retreated later and is trading at Rs.139.34 apiece. Over the past five years, the stock has delivered over 300 percent returns.
Brokerage Overview
Global brokerage firm Jefferies has initiated coverage on Welspun Living Ltd. with a ‘Buy’ rating and a price target of Rs.185 per share, indicating an upside potential of over 32 percent from the current price levels. It highlighted Welspun as India’s top home textile exporter, with over 60 percent of its revenue coming from the US.
Welspun is also expanding in fast-growing regions such as the UK, European Union, GCC nations, Japan, Australia, and New Zealand. Jefferies sees the company benefiting from India’s free trade agreements (FTAs), especially with the US and EU, like the one already finalized with the UK.
The brokerage flagged a possible slowdown in the first half of FY26 due to weaker demand and low operating leverage. Still, it expects a recovery in the second half and a strong performance from FY27 onward. Welspun’s expansion into branded products and new categories is seen as a positive step for long-term growth.
Jefferies forecasts a 12 percent CAGR in EBITDA and an 18 percent CAGR in EPS from FY25 to FY28, despite short-term challenges. The company’s strong balance sheet, consistent dividend policy, and return on equity in the mid-to-high teens add to its appeal as a solid long-term investment.
Welspun Living Ltd reported a strong performance in FY25, with total income reaching Rs. 1,06,972 million, marking an 8.9 percent year-on-year growth. The Home Textile Exports Business led the way with a 10.8 percent increase and a healthy EBITDA margin of 14.7 percent. The Advanced Textile and Domestic Consumer businesses grew by 7.8 percent and 5.1 percent YoY, respectively, while innovation sales rose 4 percent to Rs. 22,667 million.
EBITDA for FY25 stood at Rs. 14,507 million with a margin of 13.6 percent, though down by 186 basis points. The Flooring Business contributed Rs.8,891 million in revenue, with EBITDA at Rs. 738 million and an 8.3 percent margin. Meanwhile, net debt rose to Rs. 16,025 million from Rs. 13,542 million as of March 2024.
Quarterly Financial Performance
According to its recent financial updates, Welspun Living Ltd reported consolidated revenue of Rs.2,646 crores in Q4 FY25, marking a 2.76 percent increase from Rs.2,575 crores in Q4 FY24 and a 6.26 percent rise from Rs.2,490 crores in Q3 FY25.
The company’s net profit rose to Rs.133 crores in Q4 FY25, reflecting a 1.53 percent increase from Rs.131 crores in Q4 FY24 and an 8.13 percent rise over Rs.123 crores reported in Q3 FY25.
The company has a Return on Capital Employed (ROCE) of 13.28 percent and a Return on Equity (ROE) of 13.26 percent. Its Price-to-Earnings (P/E) ratio stands at 20.35, higher than the industry average of 19.51. Furthermore, the company maintains a current ratio of 3.34, a debt-to-equity ratio of 0.57, and an Earnings Per Share (EPS) of Rs.6.58.
Written by – Siddesh S Raskar
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