Welspun Living Q1FY26 (Consolidated) results

• Welspun Living’s (WLL’s) revenue declined by 10.9% y-o-y to Rs. 2,261 crore, significantly lower than our and average street expectation of Rs. 2,688 crore and Rs. 2,676 crore, respectively, owing to global trade uncertainties around US-India trade dynamics, which impacted the market sentiment. Home textile and flooring businesses revenue declined by 11% and 15% y-o-y, respectively.
• Gross margin improved by 127 bps y-o-y to 47.7%, while EBITDA margin declined by 349 bps y-o-y to 10%, largely due to negative operating leverage. EBITDA margin lagged our and street expectation of 12.2%.EBITDA declined by 34% y-o-y to Rs. 225 crore and adjusted PAT fell by 52% y-o-y to Rs. 89 crore (missing our and average street expectation of Rs. 156 crore).
• WLL’s board has approved a capex of USD 13 million (~Rs. 112 crore) for setting up a pillow manufacturing unit at Nevada, USA by its subsidiary company Welspun USA Inc. to further expand its Home textile business in USA. The unit will have manufacturing capacity of 10.80 million pillows annually and is expected to be operational by January 2026. It will give an additional revenue of ~USD 50 million at full capacity utilization. The project would be financed 70% through term loans and ~30% through internal accruals.
• View: Overall, weak performance by WLL in Q1FY26, missing estimates on all fronts. Currently we have a Buy rating on the stock. 

Results (Consolidated)                                                                         Rs. crore

Actual vs estimates                                                   Rs. crore