Welspuns revenue up 21 per cent

Welspun India Ltd (WIL), part of the $ 3 billion Welspun Group has announced Q1-FY15 results, showing strong growth in revenue and profitability in comparison to the corresponding period last year.

Welspuns revenue at Rs 11,467 million against Rs 9,446 million in Q1-FY14, shows 21% growth YoY with strong volume growth, especially in towels and rugs. Its operational EBITDA is up by 24% at Rs 2,506 million against Rs 2,013 million in Q1FY14. Operational EBITDA margin improved to 21.9% in Q1FY15 as compared to 21.3% in Q1FY14 and 18.6% in Q4FY14.

Depreciation for the quarter stood at Rs 686 million in Q1FY15 as compared to Rs 415 million in Q1FY14. Finance cost at Rs 713 million is higher y-o-y (Rs 558 million in Q1FY14) on account of  higher debt taken for the backward integration capex as well as working capital and also due to higher working capital interest cost due to discontinuation of interest subvention.

Profit after Tax (after minorities and associates) grew 17% y-o-y to Rs 1,050 million in Q1FY15 against Rs 899 million in Q1FY14. The net worth at the end of Q1FY15 stands at Rs 12,197 million against Rs 11,097 million at the end of FY14. At the end of the quarter, gross debt stands at Rs 30,069 million (Rs 30,293 mn at end-FY14) and gross long term debt stands at Rs 18,960 million (Rs 18,944 million at end-FY14). As on 30th June 2014, net debt stands at Rs 27,260 million (Rs 26,635 million at end-FY14) implying a net debt/equity of 2.23x (vs 2.40x at end-FY14). The net debt/operational EBITDA (annualised) stands at 2.72x.

The modernisation, expansion and vertical integration project, which is currently underway, is on schedule. The outlook for Indian textiles, especially cotton textiles, appears to be promising in the coming years. The US economy is on the growth path and consumer demand is expected to improve further. The European market is also showing signs of revival and Indian textile exports to Europe are growing, despite a disadvantage in terms of import duty compared to other exporters like Pakistan, Bangladesh and Turkey. The Far-East markets (such as Japan and Korea) hold strong potential for growth. The domestic market is also growing at a rapid pace and is expected to be a significant growth driver in the next few years.

Speaking about the performance, B K Goenka, Chairman, Welspun India Ltd said, ?We continue to tread steadily on the growth path while also improving our profitability.  We have several levers for growth such as new markets, new products and new channels, which will help us maintain our leadership position in the home textile category.  Our ongoing capex will also help in maintaining our quality and scale leadership.?

Welspun India Ltd, part of US$ 3 billion Welspun Group is among the top three home textile manufacturers in the world and the largest home textile company in Asia. With a distribution network in more than 50 countries and manufacturing facilities in India, it is the largest exporter of home textile products from India. Supplier to 14 of Top 30 global retailers, the company has marquee clients like Wal-Mart, JC Penney, Target and Macy?s to name a few.