{"id":155310,"date":"2023-10-25T10:54:05","date_gmt":"2023-10-25T14:54:05","guid":{"rendered":"https:\/\/44.250.171.167\/?p=155310"},"modified":"2023-10-25T10:54:07","modified_gmt":"2023-10-25T14:54:07","slug":"welspun-living-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/welspun-living-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Welspun Living Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Welspun Living Ltd (WELSPUNIND) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Revenue Growth<\/strong>\n<ul>\n<li>Revenue grew 19% year-on-year and 15% quarter-on-quarter to highest ever quarterly revenues of INR2,542 crores.<\/li>\n<li>Growth driven by upcoming holiday season in US leading to increased buying from retailers.<\/li>\n<li>Export revenues grew 22% year-on-year with innovation products growing 67%.<\/li>\n<li>Flooring revenues grew 52% year-on-year to record revenues of INR243 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Profitability<\/strong>\n<ul>\n<li>Highest EBITDA of INR391 crores in last 8 quarters at 15.4%, up 158% year-on-year.<\/li>\n<li>Flooring business saw highest ever quarterly EBITDA at 8.3%, up from 2.6% last year.<\/li>\n<li>Profit after tax grew over 22 times year-on-year to INR197 crores.<\/li>\n<li>EPS grew significantly to INR2.04 from INR0.08 last year.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Market Environment<\/strong>\n<ul>\n<li>US showing growth despite banking crisis and rate hikes.<\/li>\n<li>Indian market resilient but seeing inflation volatility affecting consumer purchasing power.<\/li>\n<li>Global economic scenario expected to remain volatile.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Expanding Distribution<\/strong>\n<ul>\n<li>Welspun is most widely distributed home textile brand in India, now in 600+ towns and 15,511 outlets.<\/li>\n<li>Brand SPACES gained market share and emerged as leading brand in modern trade channel.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Sustainability Efforts<\/strong>\n<ul>\n<li>Started operations of 30 MW solar power plant, 47 MW round the clock renewable energy project approved.<\/li>\n<li>Targeting 100% renewable energy by 2030.<\/li>\n<li>Ahead of peers globally in ESG and sustainable practices.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth Outlook<\/strong>\n<ul>\n<li>The company is cautiously optimistic about growth of around 10-12% in revenue and 15% in EBITDA going forward.<\/li>\n<li>Committed to this growth target and will look to debottleneck capacities if needed through small investments.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Flooring Business Growth and Outlook<\/strong>\n<ul>\n<li>The flooring business saw strong orders in the US and UK this quarter.<\/li>\n<li>These were not one-off orders but part of an ongoing trend driven by the China plus one strategy and the company&#8217;s modern manufacturing capabilities.<\/li>\n<li>The capacity utilization and order run rate will continue going forward.<\/li>\n<li>Company sees significant growth opportunity in flooring exports to the US.<\/li>\n<li>Addresses $10 billion out of the $90 billion flooring market in the US, with plans to take market share from China.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Domestic B2C Business<\/strong>\n<ul>\n<li>The domestic B2C textile business is now at positive EBITDA and not burning cash.<\/li>\n<li>9-10% of revenue continues to be invested in marketing this business.<\/li>\n<li>Pan-India network of around 125 distributors and over 200 sales staff to supply products to multi-brand outlets.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Impact of UK FTA<\/strong>\n<ul>\n<li>The UK FTA presents an opportunity given UK is 10% of home textile demand.<\/li>\n<li>Will benefit towel and sheet exports.<\/li>\n<li>Orders could start coming in around 6 months after FTA approval.<\/li>\n<li>EU FTA not expected now but UK FTA is high priority.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capacity Expansion<\/strong>\n<ul>\n<li>The company is operating at 95% utilization currently. It is exploring capacity expansion based on growth trends.<\/li>\n<li>Any capacity addition will be done prudently based on IRR and ROSI. The company sees opportunities from global shifts with countries like China.<\/li>\n<li>Deposit repricing impact will continue over next few quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>US Flooring Growth and Cotton Price Outlook<\/strong>\n<ul>\n<li>The significant US flooring growth is broad-based across distributors, retail and hospitality segments rather than just 1-2 large players.<\/li>\n<li>The growth is in both hard and soft flooring. China disruptions have further boosted growth.<\/li>\n<li>Cotton prices are seen stable around INR61,000-62,000\/candy.<\/li>\n<li>The company has 4 months of cotton inventory as buffer against volatility. It is closely tracking prices and can take appropriate steps if required.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Home Textiles Business Performance<\/strong>\n<ul>\n<li>A home textiles export to the US continues to see highest ever quarterly revenues and market share.<\/li>\n<li>Company continues to innovate with products, brands, and partnerships to maintain competitive edge.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Welspun Living Ltd (WELSPUNIND) Q2 FY24 Earnings Concall Revenue Growth Revenue grew 19% year-on-year and 15% quarter-on-quarter to highest ever quarterly revenues of INR2,542 crores. Growth driven by upcoming holiday season in US leading to increased buying from retailers. Export revenues grew 22% year-on-year with innovation products growing 67%. Flooring revenues grew [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,6351,392],"tags":[10169,9793],"class_list":["post-155310","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-consumer-stocks","category-earnings","tag-earnings","tag-textile"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":155363,"url":"https:\/\/alphastreet.com\/india\/dixon-technologies-india-ltd-q2-fy24-earnings-conference-call-insights\/","url_meta":{"origin":155310,"position":0},"title":"Dixon Technologies India Ltd Q2 FY24 Earnings Conference Call Insights","author":"Praveen","date":"October 26, 2023","format":false,"excerpt":"Key highlights from Dixon Technologies India Ltd (DIXON) Q2 FY24 Earnings Concall Financial Performance Consolidated revenues grew 28% year-over-year to INR4,943 crores in Q2 FY24. 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