Welspun Living’s margin rebounds sequentially, but remains below peers
Revenue momentum improved from Q3, but weaker home textiles and flooring profitability kept Q4 earnings below last year’s level.
Filed 15 May 2026, 14:06 IST · Welspun Living Ltd (WELSPUNLIV)
Key takeaways
- Consolidated revenue fell 7.95% year on year, while operating profit declined 21.13% as costs fell less than sales.
- Operating margin recovered 3.14 percentage points sequentially to 10.23%, but remained 4.58 percentage points below the 93-peer sector median.
- Net profit was supported by a tax rate that fell 5.78 percentage points year on year, while other income contributed 12.6% of pre-tax profit.
Price around the results
Sequential recovery did not erase the annual decline
The consolidated business regained momentum in Q4FY26, with revenue rising +7.66% sequentially and operating profit increasing +55.38%. The year-on-year picture was weaker: revenue fell -7.95% and operating profit dropped -21.13%, showing that the quarterly recovery was from a softer Q3 base rather than a return to last year’s scale. Lower interest expense, down -35.71% year on year, partly cushioned the operating decline, although depreciation rose +11.02%.
Costs narrowed the annual margin, while tax aided profit
Year on year, expenses declined -6.17%, less than the -7.95% revenue decline, so operating margin contracted 1.71 percentage points. Sequentially, revenue grew +7.66% while expenses rose only +4.02%, widening operating margin by 3.14 percentage points. Other income of Rs 15.77 cr represented 12.6% of pre-tax profit, and the tax rate fell 5.78 percentage points year on year, making net profit quality less dependent on operating improvement than the headline sequential rebound suggests.
Home textiles and flooring remained the pressure points
Management said Q4 home textile revenue declined 5.4% year on year and its EBITDA fell 13.3%; it also reported a 56.7% year-on-year decline in flooring EBITDA. The presentation said bath linen capacity had increased by 6,400 MT from July 2025. Management outlined medium-term aspirations of Rs 15,000 cr in total revenue and EBITDA margins above 15%, while also targeting non-US revenue above 50% and net debt/equity below Rs 1,000 cr.
Margin still trails most reported Consumer Discretionary peers
Welspun Living’s 10.23% operating margin was 4.58 percentage points below the 14.81% median for 93 Consumer Discretionary peers that had reported the same quarter. It ranked 23rd from the bottom, so the sequential margin recovery has not yet closed the sector gap.
The market reaction was unusually large for this stock
The stock rose +5.06% on the result date and was up +3.70% after five sessions, versus a median absolute move of 1.74% across eight prior results. Its past reactions were mixed, with three rises and five falls, making the initial move larger than usual; a corporate-action overlap was also flagged for the session.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,435 cr | ₹2,262 cr | +7.66% | -7.95% |
| Other income | ₹16 cr | ₹-5 cr | — | +680.69% |
| Expenses | ₹2,186 cr | ₹2,102 cr | +4.02% | -6.17% |
| Operating profit | ₹249 cr | ₹160 cr | +55.38% | -21.13% |
| Operating margin (%) | 10.23% | 7.09% | — | — |
| Interest | ₹37 cr | ₹39 cr | -6.40% | -35.71% |
| Depreciation | ₹103 cr | ₹102 cr | +0.82% | +11.02% |
| Profit before tax | ₹125 cr | ₹14 cr | +765.84% | -25.52% |
| Tax | ₹19 cr | ₹12 cr | +60.13% | -46.05% |
| Net profit | ₹106 cr | ₹3 cr | +4030.74% | -20.06% |
| EPS (₹) | ₹1.08 | ₹0.01 | +10700.00% | -22.86% |
Operating margin of 10.23% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +5.06% | +5.25% |
| Next session | +3.31% | — |
| 5 sessions | +3.70% | +3.58% |
| 15 sessions | +6.08% | — |
| 30 sessions | +18.33% | — |
Volume on the results session was 6.27× 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 reach total revenue of ₹15,000 crores in the medium term.
- The company targets EBITDA margins recovering to more than 15% in the medium term.
- The company aspires to reduce net debt/equity to below ₹1,000 crores.
- The company aspires to increase non-US revenue to more than 50%.
Expansion
- Bath Linen capacity increased by 6,400 MT from July 2025.
Problems & risks
- Q4 FY26 Home Textile revenue declined 5.4% year over year.
- Q4 FY26 Home Textile EBITDA declined 13.3% year over year.
- Q4 FY26 Flooring EBITDA declined 56.7% year over year.
- FY26 Flooring revenue declined 17.3% year over year.
- FY26 Home Textile EBITDA margin declined by 440 basis points year over year to 8.7%.
What to watch
- Whether operating margin holds above 10.23% after the sequential recovery.
- Whether home textile EBITDA margin improves from 8.7% after its 440-basis-point annual decline.
- Whether non-US revenue moves above management’s 50% medium-term aspiration.