Welspun India Ltd. (WIL), part of the $3 billion Welspun Group has reported stronger growth in revenue and operating profit in the second quarter of the current year as compared to the same period the previous year.
Revenue at Rs. 14,135 million during the quarter was Rs. 11,589 million in Q2 FY14. This is a 22 per cent growth y-o-y driven by strong volume growth. Operational EBITDA was up by 25 per cent at Rs. 3,169 million (Rs. 2,540 million). Operational EBITDA margin was marginally higher at 22.4 per cent as compared to 21.9 per cent. Reported EBITDA was up by 21 per cent at Rs. 3,360 million vs. Rs. 2,785 million in Q2FY14. Depreciation was 50 per cent higher y-o-y at Rs. 717 million (vs. Rs. 478 million in Q2FY14). This was mainly on account of the depreciation on the newly commissioned projects under the new depreciation policy.
Profit after tax stood at Rs. 1,299 million (Rs. 1,166 million), a growth of 11 per cent y-o-y, where net worth stood at Rs. 12,764 million at the end of Q2FY15. At the end of the quarter, gross debt stood at Rs. 29,143 million, lower compared to Rs. 30,293 million at end-FYI4, and gross long-term debt stood at Rs. 18,638 million (Rs. 18,944 million at end-FY14).
The modernisation, expansion and vertical integration project is half-way through, with capex of Rs. 12 billion completed by the end of the quarter. The 170,000 spindles and 140 looms, which are part of this plan, have started commercial operation. The remaining capex of around Rs. 13 billion is expected to be completed over the next two years.
The US economy is expected to deliver strong GDP growth in 2015. With Europe taking steps to come out of the recession and the lndian economy expected to grow faster, global economic growth is sure to get a boost.
The Indian home textile industry continues consolidating its position as the leader in cotton home textiles. Backed by its scale, technology and integrated presence, the industry is expected to continue expanding its global market share.
Speaking about the performance, Mr. B.K. Goenka, Chairman, Welspun lndia Ltd., said: “We have completed half of our major capex plan, thus enabling larger in-house production of yarn and fabric. This milestone will consolidate our leadership position in the home textile category, in terms of scale as well as quality on account of reduced dependence on outside suppliers. We have increased our focus on our domestic as well as international brands, which should further improve our market position in the coming years and create long-term shareholder value.”