Welspun India Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Welspun India Ltd (WELSPUNIND) Q4 FY22 Earnings Concall

Q&A Highlights:

• Abhishek Nigam from B&K Securities asked about reason for revenue decline in Home Textile segment and utilization numbers also going down. Dipali Goenka CEO answered that there has been a complete glut in the whole logistics; and inventories and warehouses are choked. So there is a correction happening in stock. Going forward, the situation doesn’t look good right now and definitely demand would be a little muted.

• Abhishek Nigam from B&K Securities also asked about price hikes in 4Q and 1Q23. Dipali Goenka CEO said the company has already taken two rounds of price increases. Definitely all the price can’t be passed on to the consumer, because then the demand is going to slow down.

• Abhishek Nigam from B&K Securities enquired about the drivers of Flooring turning to a marginal loss and outlook for 1Q23. Rajesh Mandawewala MD said it’s due to cost on commodities, which have been relentless and also the ocean freights, which makes it difficult. Going forward, the company expects the situation to continue.

• Biplab Debbarma from Antique Stock Broking asked about the demand outlook. Dipali Goenka CEO answered that the demand outlook looks muted and it doesn’t look very encouraging for the next couple of quarters. Post the holiday season is the time, the company will see the green shoots coming in.

• Akshay Kothari from Envision Capital asked about the revenue from the top 5 or 10 customers. Dipali Goenka CEO answered that it would be major of the number. The company is doing around $782 million in Home Textiles. So it will be about 40%, 45%.

• Prathamesh Sawant from Axis Securities queried about truckers issue in U.S. and Canada and if this problem is about to end in next quarter or two. Dipali Goenka CEO replied that it’s not just because of the COVID, it is also because of the demand and the Amazon factor. They have basically hired most of the truckers, and prices are far dearer.

• Prathamesh Sawant from Axis Securities asked about the ballpark figure of cotton price in two, three quarters down the line. Dipali Goenka CEO replied that the company feels the floor will open at INR70,000, not lesser than that. That’s what it looks like at the moment.

• Kalpesh Gothi from Valentis Advisors asked on ESG and target for carbon neutrality. Dipali Goenka CEO answered that the company is water positive today. And on carbon neutrality, the company has a road map for 2030.

• Prerna Jhunjhunwala from Elara Capital asked about the capex plans, when the towel capacity expansion of 25% to reach 1,00,2000 tonnes per annum is expected to come in. Rajesh Mandawewala MD replied that end of 1Q23 the company will be there. And most of the capex is either concluded or will get concluded by Sept. 2022.