Welspun Living reported a stellar Q2FY27 with a 1042% jump in net profit to Rs 170 crore. Revenue grew 16% YoY to Rs 2,838 crore, bolstered by strong performance in its flooring and home textiles segments. Notably, the company improved its balance sheet from a net debt of Rs 775 crore in March 2026 to a net cash positive position by September 2026. Axis Securities maintains a 'Buy' rating with a target price of Rs 240, citing structural growth prospects and benefits from international trade agreements.
Welspun Living Q2 Profit Surges 1042% to Rs 170 Crore
Revenue grew 16% YoY to Rs 2,838 crore while EBITDA margins expanded 563 bps to 11.91%.
Reader Takeaway: Strong operational efficiency and a shift to net cash drive optimism, though cotton price volatility remains a concern.
What just happened
Welspun Living delivered a significant earnings beat in Q2FY27, reporting a net profit of Rs 170 crore, a ten-fold increase compared to the same period last year. Revenue stood at Rs 2,838 crore, exceeding broker estimates by 4%. The company's EBITDA margin saw a sharp expansion to 11.91%, driven by improved operating efficiencies and a favorable product mix. The firm also achieved a major balance sheet milestone by transitioning to a net cash positive position as of September 2026, down from a net debt of Rs 775 crore in March 2026.
Why this matters
The company’s operational performance remains strong, with the home textiles segment—its primary revenue driver—growing 15.8% YoY. The flooring segment also showed significant margin improvement, rising to 10.8% from 1.9% in the prior year. Investors are closely watching the company’s ability to leverage Free Trade Agreements (FTAs) to gain market share in the UK and European markets, aiming to displace regional competitors.
Management Outlook
Management has guided for an annual revenue growth rate of 14-15% over the next 3–4 years. The company is targeting normalized EBITDA margins of 15% within two years. Planned annual capital expenditure of Rs 400–500 crore will focus on automation and productivity enhancement to maintain competitiveness.
Risks to watch
Key risks include global recessionary pressures and potential inflation in export markets, which could impact consumer demand. Additionally, domestic cotton prices remain elevated at approximately Rs 68,000 per candy. While the company is currently carrying 4-5 months of inventory, fluctuations in commodity prices and currency exchange rates remain primary monitoring points for the near term.
What to track next
Watch for updates on the US facility utilizations, specifically the performance of the Nevada plant, which became fully operational in June 2026, and any further updates on market share gains in the UK sheet market.