Welspun Living Ltd (WELSPUNLIV) Q2 FY27 Results Analysis: EBITDA Margin Expands 604 bps, Net Debt Hits Zero
Welspun Living Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 2,838.12 Cr (+16.27% YoY) and PAT growth of +1041.72% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 30, 2026 |
|---|---|
| Revenue (Q2) | Rs. 2,838.12 Cr (+16.27% YoY) |
| PAT (Q2) | Rs. 169.66 Cr (+1041.72% YoY) |
| EBITDA margin | 12.88% (+604 bps YoY) |
| EPS (Q2) | Rs. 1.86 (+1330.77% YoY) |
Quarter Snapshot
Q2 FY27 delivered 16.27% YoY revenue growth with EBITDA margin expanding 604 bps YoY to 12.88% despite the Vapi flood, and the net-debt-zero target was met two quarters early with H1 FCF of Rs.950.04 cr. Home Textiles margin at 12.02% still trails management's 15-16% band, and the quarter's margin benefited from an inventory drawdown that reverses on restocking. FY27 guidance on revenue and margin remains on track, with Vapi restoration and Q3 cotton restock as the swing factors.
Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Double-digit consolidated revenue growth, FY27 | reiterated on the Q1 FY27 earnings call despite the flood | H1 +19.83% YoY | On Track |
| EBITDA margin "low teens", FY27 | Q1 FY27 call: "maintaining margins in the low teens" | H1 12.70%; Q2 12.88% (management basis) | On Track |
| Home Textile segment EBITDA margin 15–16% | Q4 FY26 call: "Home textile will maintain the 15% to 16% in EBITDA" (open-ended) | 12.02% in Q2 | Below the band this quarter |
| Net debt zero by FY27 | Q4 FY26 call | ≈nil at Sep-26 (8.97; net cash 1.55 incl. bank balances) | Met, ahead of schedule |
| US pillow revenue to double to USD 60 Mn | Q4 FY26 call | 2.4x YoY in Q2; both facilities operational — USD run-rate not disclosed | On Track |
| Domestic business Rs.1,000 Cr | Q2 FY26 call, reiterated Q1 FY27 | +28.2% YoY; brand +37% (absolute not disclosed) | On Track |
| Capex Rs.400–500 Cr FY27 | Q1 FY27 call | 151.33 in H1 (consolidated cash-flow statement) — H2 acceleration needed | Stretch |
| ROCE low teens during FY27; >15% growth over 3 years | Q4 FY26 call | 12.7% (management-reported) | On Track |
Key Investment Insights
Key Positives
- Revenue grew 16.27% YoY to Rs.2,838.12 cr; H1 revenue +19.83% YoY
- Management-basis EBITDA margin expanded 604 bps YoY to 12.88%, a fourth consecutive quarter of expansion despite the Vapi flood
- Flooring revenue re-accelerated (+19.29% YoY, +15.30% QoQ) with PBDIT margin of 10.83% vs 2.07% a year ago
- Domestic business grew 28.2% YoY (Welspun brand +37%); US pillow business grew 2.4x YoY with both US facilities operational
- Net debt reduced to Rs.8.97 cr (net cash Rs.1.55 cr incl. bank balances) from Rs.769.94 cr at March-26, meeting the FY27 net-debt-zero target two quarters early
- H1 CFO of Rs.1,101.37 cr (3.31x PAT) and FCF of Rs.950.04 cr
- Finance costs fell 21.80% YoY to Rs.33.89 cr
- Rs.125 cr on-account insurer payment received for the Vapi flood; deferred tax credit of Rs.7.16 cr makes the net post-tax flood impact broadly neutral
Risk Factors
- Home Textiles PBDIT margin of 12.02% remains ~300 bps below the 15-16% band management said it would maintain
- Sequential revenue momentum slowed to +1.53% QoQ due to the Vapi plant outage from July 23, 2026
- Cost of materials +25.06% YoY and purchases of stock-in-trade +102.35% YoY outgrew revenue growth of +16.27%
- Q2 margin was flattered by an inventory drawdown of Rs.241.79 cr (sales ran off stock while Vapi idled), which reverses on restocking
- Capex of Rs.151.33 cr in H1 runs below the Rs.400-500 Cr FY27 guidance, requiring H2 acceleration
- YoY growth multiples are flattered by lapping a tariff-depressed trough (year-ago PAT of Rs.14.86 cr)
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.