Welspun Living expands margin as operating profit grows 42% year on year
Revenue growth outpaced expenses both year on year and sequentially, while management cited fibre and freight costs as factors to monitor.
Filed 13 Aug 2026, 16:19 IST · after market close · Welspun Living Ltd (WELSPUNLIV)
Key takeaways
- Consolidated operating profit grew 42.44% year on year as expenses rose slower than revenue, lifting operating margin by 1.52 percentage points.
- Net profit rose 82.09% year on year, but other income contributed 15.46% of profit before tax and the tax rate was 26.21%.
- Operating margin improved for the third consecutive quarter-on-quarter step to 11.49%, though it remained 1.79 percentage points below the 13.28% median for 169 reported Consumer Discretionary peers.
Price around the results
Revenue growth was led by overseas and innovation-led businesses
Welspun Living's consolidated revenue grew 23.66% year on year and 14.78% sequentially, with expenses increasing more slowly in both comparisons. Management said its UK and Europe businesses grew more than 20% during the quarter, while innovation-led sales rose 16% and accounted for 25% of revenue. The company also told analysts that Nevada fully commenced production on June 15, 2026.
Margin recovery continued, but other income lifted pre-tax profit
Operating margin widened by 1.52 percentage points year on year and 1.26 percentage points sequentially because revenue growth exceeded expense growth. Lower interest costs, down 19.06% year on year, also supported profit before tax. Other income represented 15.46% of profit before tax, so the 82.09% year-on-year increase in net profit was not entirely operating-led; sequentially, the tax rate also rose by 11.00 percentage points to 26.21%.
Operating margin has risen from the Q2FY26 trough
Operating margin has improved for three consecutive quarter-on-quarter steps, from 6.28% in Q2FY26 to 7.09%, 10.23% and now 11.49%. The latest margin was still 1.79 percentage points below the 13.28% median among 169 Consumer Discretionary peers that had reported the same quarter. Management said it expects double-digit revenue growth and EBITDA margins in the low teens for FY27.
The stock had no immediate reaction after the filing
The results were filed after market close, so there was no market reaction at the time of reporting. Across the past eight result reactions, the stock rose four times and fell four times, with a median absolute move of 2.52%, indicating a mixed but typically moderate response pattern.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,795 cr | ₹2,435 cr | +14.78% | +23.66% |
| Other income | ₹34 cr | ₹16 cr | +115.98% | +17.85% |
| Expenses | ₹2,474 cr | ₹2,186 cr | +13.17% | +21.58% |
| Operating profit | ₹321 cr | ₹249 cr | +28.90% | +42.44% |
| Operating margin (%) | 11.49% | 10.23% | — | — |
| Interest | ₹34 cr | ₹37 cr | -6.09% | -19.06% |
| Depreciation | ₹100 cr | ₹103 cr | -2.57% | +14.27% |
| Profit before tax | ₹220 cr | ₹125 cr | +76.01% | +77.72% |
| Tax | ₹58 cr | ₹19 cr | +203.31% | +66.47% |
| Net profit | ₹163 cr | ₹106 cr | +53.17% | +82.09% |
| EPS (₹) | ₹1.69 | ₹1.08 | +56.48% | +83.70% |
Operating margin of 11.49% compares with a Consumer Discretionary sector median of 13.28% across 169 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- UK and Europe businesses delivered more than 20% growth during the quarter.
- Innovation-led sales grew 16% during the quarter and represented 25% of revenues.
Guidance & outlook
- Welspun Living expects double-digit revenue growth and EBITDA margins in the low teens for FY27.
- The company remains on track to double its pillow business to USD 60 million in FY27.
Expansion
- Nevada fully commenced production effective June 15, 2026.
New initiatives
- The company targets 100% renewable energy under its carbon-neutral programme by 2030.
- The company targets zero fresh water use in production operations by 2030.
Competition
- India is the largest exporter of terry towels and sheets to the US.
Problems & risks
- The company says the West Asia conflict is keeping Brent crude prices volatile.
- The company identifies fibre and freight costs as factors requiring monitoring.
What to watch
- Whether operating margin holds above 11.49% as fibre and freight costs remain swing factors to monitor.
- Whether the Nevada facility, which commenced production on June 15, 2026, supports the next quarter's revenue mix.
- Progress toward management's stated goal of doubling the pillow business to USD 60 million in FY27.