Welspun Living expands margin as slower cost growth drives profit recovery
Revenue grew +16.27% YoY and the tax rate fell by 12.75 percentage points, while the stock reaction exceeded its usual move.
Filed 30 Oct 2026, 13:37 IST · Welspun Living Ltd (WELSPUNLIV)
Key takeaways
- Consolidated revenue grew +16.27% YoY while expenses rose +9.29%, lifting operating profit by +120.43%.
- Operating margin expanded by 5.63 percentage points YoY to 11.91%, but other income still contributed 10.84% of pre-tax profit.
- The stock rose +3.88% after the results, a larger move than its 2.65% median reaction despite an even split between past rises and falls.
Price around the results
Revenue growth translated into a sharp profit recovery
Welspun Living reported consolidated revenue growth of +16.27% YoY, with expenses rising a slower +9.29%; this drove operating profit growth of +120.43%. Sequentially, revenue increased +1.53% and operating profit rose +5.27%, showing continued momentum into Q2FY27. Net profit growth of +1041.72% also reflects the low year-ago base, when net profit was Rs 14.86 cr.
Margin improved as costs grew slower than sales
Operating margin widened by 5.63 percentage points YoY and 0.42 percentage points QoQ because expenses grew more slowly than revenue in both comparisons. Interest expense fell +21.82% YoY, providing another lift below operating profit. The tax rate declined by 12.75 percentage points YoY to 24.87%, while other income accounted for 10.84% of pre-tax profit, so the net profit increase was not entirely operating-led.
Margin recovery continues but remains below the peer median
Operating margin has risen for four consecutive quarters, from 7.09% in Q3FY26 to 10.23%, 11.49% and then 11.91%. It was still 1.18 percentage points below the 13.09% median for the 129 Consumer Discretionary peers that had reported the same quarter. The comparison points to further room between Welspun Living's current margin and the sector's reported midpoint.
Nevada production adds capacity to an established US position
The company said its Nevada facility fully commenced production on June 15, 2026. Management said Welspun ranks first in the US for towels and bath rugs and among the top two in sheets. It also stated an aspiration to become the global number-one player in bath solutions.
The result-day rise was above Welspun Living's usual reaction
The stock rose +3.88% on the results date, with relative performance of +3.38% and trading volume at 7.32 times the reference level. Across the last eight result reactions, the stock rose four times and fell four times, while the median absolute move was 2.65%, making this reaction larger than its typical move.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,838 cr | ₹2,795 cr | +1.53% | +16.27% |
| Other income | ₹24 cr | ₹34 cr | -28.16% | +65.90% |
| Expenses | ₹2,500 cr | ₹2,474 cr | +1.04% | +9.29% |
| Operating profit | ₹338 cr | ₹321 cr | +5.27% | +120.43% |
| Operating margin (%) | 11.91% | 11.49% | — | — |
| Interest | ₹34 cr | ₹34 cr | -1.37% | -21.82% |
| Depreciation | ₹103 cr | ₹100 cr | +2.32% | +1.82% |
| Profit before tax | ₹226 cr | ₹220 cr | +2.48% | +848.03% |
| Tax | ₹56 cr | ₹58 cr | -2.75% | +526.79% |
| Net profit | ₹170 cr | ₹163 cr | +4.34% | +1041.72% |
| EPS (₹) | ₹1.86 | ₹1.69 | +10.06% | +1330.77% |
Operating margin of 11.91% compares with a Consumer Discretionary sector median of 13.09% across 129 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.88% | +3.38% |
Volume on the results session was 7.32× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company aspires to become the global number-one player in bath solutions.
Expansion
- The Nevada facility fully commenced production on June 15, 2026.
Competition
- The company ranks first in the US for towels and bath rugs and ranks among the top two in sheets.
What to watch
- Whether operating margin holds above 11.91% next quarter.
- Whether revenue growth improves from +1.53% QoQ as Nevada production scales.
- Whether the tax rate remains near 24.87% and other income stays below 10.84% of pre-tax profit.