JM Financial maintains Buy on Welspun Living; lowers target price to Rs 200

JM Financial has maintained Buy call on Welspun Living with a target price of Rs 200. The current market price of Welspun Living is Rs 131.2. The time period given by the analyst is a year when Welspun Living price can reach a defined target. Welspun Living, incorporated in 1985, is a Mid Cap company with a market cap of Rs 12611.90 crore, operating in the Textiles sector.

Welspun Living’s key products/revenue segments include Rugs, Blankets & Shawls, Other Operating Revenue and Scrap for the year ending 31-Mar-2024.

Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 2648.16 crore, up 4.77% from last quarter Total Income of Rs 2527.69 crore and up 1.20% from last year same quarter Total Income of Rs 2616.72 crore. The company has reported net profit after tax of Rs 133.04 crore in the latest quarter. The company’s top management includes Mr.Balkrishan Goenka, Mr.Rajesh Mandawewala, Ms.Dipali Goenka, Mr.Altaf Jiwani, Mr.Pradeep Poddar, Mr.Sunil Duggal. Company has S R B C & Co. LLP as its auditors. As on 31-03-2025, the company has a total of 96 crore shares outstanding.

Investment Rationale
Welspun Living reported an EBITDA of Rs 3.1 billon, marginally higher than JM Financial estimated EBITDA margin increased to ~11.9% vs 11.3% in 3Q. Margins remained under pressure during the quarter given lower offtake than expected given tariff uncertainty. The company witnessed a cautious approach by customers in 4Q given tariff uncertainty leading to margin pressure; consequently, the company has refrained from giving any guidance for FY26. The company has maintained ~6 months of cotton stock to help stabilize margins in situation of higher raw material costs; pillow plant ramp-up remains on track with current utilization at 31% – revenue from this segment at $15 million in FY25. The flooring business remains under pressure amidst tariffuncertainty – soft flooring to witness revival given India-UK FTA; the capex guidance for FY26 stands at Rs 3 billion with ~Rs 1 billion incurred in 4QFY25 and ~ Rs 7 billion incurred in FY25; Rs 2 billion to be spent towards additional terry towel capacity of 3,600 metric tons taking total capacity to 100ktpa. Net debt as at end of 4QFY25 stood at Rs 16 billion compared to Rs 16.5 billion as at end of 3QFY25. The brokerage believes that a relatively subdued cotton price outlook and GOI?s focus on developing the textile ecosystem is likely to drive earnings trajectory for the company. JM Financial maintains a BUY. Promoter/FII Holdings
Promoters held 66.24 per cent stake in the company as of 31-Mar-2025, while FIIs owned 5.35 per cent, DIIs 8.93 per cent.