Brokerage Motilal Oswal has reiterated its 'Buy' rating on Welspun Living with a target price of Rs 215 after the company reported an 84% jump in Q1 FY27 profit. While the company's financial growth remains strong, investors are tracking the impact of operational disruptions at its Vapi facility caused by recent flooding.
Brokerage firm Motilal Oswal has reiterated a 'Buy' rating on Welspun Living, maintaining a price target of Rs 215. This outlook comes following the company’s recent first-quarter results for the financial year 2027, which highlighted significant growth in both revenue and profitability despite challenging operating conditions.
Welspun Living reported a strong start to the current fiscal year. The company’s consolidated revenue for the quarter rose by approximately 24% year-on-year, landing in the range of Rs 2,795 crore to Rs 2,828 crore. The bottom line performance was particularly notable, with net profit surging by roughly 84% to about Rs 161 crore. The home textiles business served as the main engine for this growth, recording a 26% to 28% increase in revenue. The flooring segment also contributed, posting a 7% growth. Additionally, the company’s pillow business, supported by its new Nevada facility, grew 2.3 times compared to the previous year.
From a profitability standpoint, the company saw its EBITDA margin improve to 12.5%, representing a 140 basis point increase over the same period last year. This gain is attributed to a better mix of high-value products and operational efficiencies.
However, the company faces a notable near-term operational risk. Starting July 23, 2026, the company’s Vapi manufacturing facility experienced severe operational disruptions due to flooding. While restoration efforts are currently underway, the plant closure is expected to affect production and performance for the second quarter of FY27. Investors will need to monitor how quickly the company can bring the facility back to full capacity, as this will influence its output in the coming months.
Beyond the temporary impact of the floods, the business remains sensitive to broader economic factors. Changes in raw material costs can directly affect profit margins, making cost management a vital factor for the company. Furthermore, Welspun Living relies heavily on export markets, which introduces risks related to fluctuations in global demand and international consumer spending patterns.
The brokerage view suggests confidence in the company’s long-term business model and volume recovery. For shareholders, the most critical updates to track will be the timeline for the full restoration of the Vapi plant, the stability of raw material prices, and whether the momentum in the home textiles segment continues through the next few quarters.