Welspun India Q4 concall’s key takeaways –
YoY financials –
Sales – 2195 vs 2247 cr
EBITDA – 320 vs 246 cr (margins at 14.6 vs 11 pc)
PAT – 129 vs 52 cr
Division wise performance –
Home textiles-
Sales- 2017 vs 2073 cr
EBITDA- 293 vs 240 cr (margins at 14.5 vs 11.6 pc)
Flooring –
Sales- 208 vs 189 cr (half of it- domestic)
EBITDA- 9 vs (-)3 cr (margins at 4.2 vs (-)1.5 pc)
Gross Debt – 2350 vs 3188 cr
Net Debt – 746 vs 1398 cr
Debt/Equity – 0.38 vs 0.56
Domestic consumer business grew 31 pc YoY. Now contributing to 8 pc of sales vs 4 pc LY
Total branded business @ 22 pc of sales vs 16 pc LY
Emerging businesses now contributing 34 pc of sales vs 26 pc LY
Most capex now behind. Only capex will now be to set up green energy capacities ( @ 200cr )
Welspun now the most widely distributed home textile brand in India
Investing heavily (marketing) in India business. Has hit EBITDA break even levels despite heavy marketing spends
Advanced textiles business grew 24 pc YoY
Announced buyback of shares at Rs 120/share and dividend of Rs 0.10/share. Combined – total outgo at 250 cr
Aim to achieve a topline growth of 10-12 pc in FY 24 with EBITDA margins at around 15 pc (that works out to be around 1300 cr of EBITDA)
Expect domestic business to grow at > 25 pc with positive EBITDA
Aim to bring Net Debt below 1000 cr
Finished goods inventory down by 20 pc
Lot of de-stocking has happened in US. Some residual de-stocking may continue in Q1. Europe is still soft. Should see good growth from Australia, GCC mkts and India
By FY 25, should be close to net debt free status
Flooring business EBITDA for FY 23 was 18 cr vs negative LY
Flooring business clocked aprox 800 cr revenues in FY 23. EBITDA margins should improve further in flooring business going forward
Once solar plant comes online (in H2 FY 24), it should help bring down energy costs by around 40 cr
Aim to hit 16000 cr topline by FY26
Advanced textiles grew 21 pc YoY in Q4. Should continue to grow at similar rates in FY24
Emerging business (retail own brands + retail licensed brands in US,Europe + advanced textiles + soft flooring) which is currently at 36 pc, should reach 45 pc of overall business by FY26
Disc: may initiate a tracking position
Hunch: company may end up over performing on its guidance
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