Global leadership in home textiles maintained
A part of the $3 billion Welspun Group, Welspun India Ltd. (WIL), one of the world’s largest home textile manufacturers, is a fully integrated one-stop shop for home textiles. Welspun’s product portfolio comprises towels, bath robes, bath rugs, mats, area rugs, carpets, bedsheets, utility bedding and fashion bedding.
With a distribution presence in more than 50 countries, WIL is also the largest exporter of home textile products from India and has been consistently recognised by TEXPROCIL for the last several years. During FY16 the company also became the largest exporter of bed linen from India.
With its global reach, delivering to 18 of the top 30 global retailers, WIL has emerged the preferred choice for its clientele in the home textiles space globally. Today, the company has a 20 per cent market share in the US in towels and 11 per cent in bed linen.
Welspun has world-class manufacturing facilities at Anjar and Vapi in Gujarat. Centered on excellence and transparency, WIL has been a trusted partner to 18 of the top 30 global retailers such as Walmart, Costco, Bed Bath and Beyond, Target, Macy’s, Carrefour, and so on.
WIL’s presence across categories helps in cross-selling and provides a competitive edge as a complete home solution provider to its clients. Its major global markets are the US, the UK and Europe. It actively engages with emerging markets like India, the Middle East and China and new markets like Australia, Latin America and the Far East. Its revenue growth is driven by volumes from the existing and new customers, new geographies, new product categories and new channels such as e-commerce, hospitality and healthcare.
2015-16 was a landmark year for Welspun India Ltd. “We have always been ahead of our competition because of our high level of commitment and team work. Whatever Welspun is today is because of each and every Welspunite’s hard work and dedication. As I see the rich potential in the team that we have all built and as we focus on our 2020 vision, I am extremely proud and confident. I know that my dream of Welspun becoming an institution will become a reality”, says Mr. B.K. Goenka, Chairman, Welspun Group.
He observes: “Firstly, in this financial year our company achieved record annual sales and profit. Secondly, we were ranked as the No.1 home textile supplier to the US for the fourth year in a row. I’m also proud to announce that we have become the first Indian textile company to receive the ‘Egyptian Cotton Trade Mark Certification Gold Seal’. All this has been possible owing to our unique approach to home textiles which has helped us cement our leadership position across the globe”.
Welspun 2.O
WIL now has a new vision, mission and value and is undertaking initiatives to transform Welspun into an institution in the times to come. “As we have taken the first step towards this journey that we call Welspun 2.O, we have adopted ‘Leading Tomorrow Together’ as our new philosophy for the Group”, he adds.
Touching on the company prospects, Mr. Goenka says: “Our textile industry, like several others, is being profoundly altered by new technologies and changing customer expectations. As we take Welspun India to the next level with Welspun 2.O, we are assessing our businesses through a fine lens. We have aligned our focus on people development and professional management. Through this we are targeting a stronger leadership pipeline that can consolidate Welspun India’s position as one of the ‘Most Innovative Home Textiles’ companies in the market and a great place to work. Our future success depends on our ability to harness our market intelligence, unique product portfolio and brand offerings. Therefore, we are continuously re-engineering ways to elevate client experiences through collaboration by launching innovative products with technology as the backbone to achieve inclusive and sustainable growth”.
Says Mr. Rajesh Mandawewala, Managing Director: “Despite a subdued global market scenario, the Indian home textile industry, and Welspun India in particular has shown considerable growth”.
Upgrading capabilities, investing for tomorrow
Technology and automation are among WIL’s key business differentiators, which allow it to be resilient and innovative. A significant part of its capex in the last three years was to modernize the manufacturing systems. The objective of this initiative was backward integration and higher operational efficiency. Preparing for the future is a key imperative for the company which is planning to invest another $120 million for plant modernization and finished product capacity expansion in FY17.
95% revenue from exports
With world-class manufacturing facilities in Gujarat, Welspun had highest global exports from India in the financial year ended March 31, 2016, in towels, bed linen and overall home textiles categories. About 95 per cent of its revenue is derived from exports to various countries across the world, with its strong presence in key markets such as the US, Canada, the UK and continental Europe.
The company owns brands (such as Christy, Spaces and Welhome) which constitute around 13 per cent of its sales. Its consistent emphasis on innovation is evident in the number of patents (26 global patents, including pending patents) and trademarks which it holds or awaits approval of. Around 34 per cent of WIL’s total revenues come from the innovative products developed by it.
Said Ms. Dipali Goenka, Joint Managing Director & CEO: “With our focus on growing our patent portfolio to brands, we invested in a multi-million marketing campaign for our Hygro Cotton range of products made using our patented manufacturing technology. In India, we have focused on building our brands Spaces Home, Beyond and Welhome in the domestic market which grew by 47 per cent in the previous year. We continue to focus on driving our vision to be recognized as the most innovative home textiles company in the world”.
Innovation, new product development
The company lays considerable emphasis on innovation and new product development. Apart from its own innovation lab, it also partners with different institutions to develop new products and solutions. During FY16, 34 per cent of sales was contributed by innovative products developed by the company.
WIL has also worked on branding and marketing its innovation. It undertook a highly successful nation-wide media campaign in the US for its patent Hygro Cotton which is also now an ingredient brand. This was well received by consumers, resulting in Hygro Cotton crossing the $100-million milestone in sales and accounting for over 10 per cent of the company’s overall revenue.
Apart from ingredient brands, the company paid greater attention to its own and licensed brands. The main focus during the year was on the ‘Spaces’ brand for the domestic market. This resulted in strong growth in the domestic retail segment of 47 per cent during the year. The share of branded sales reached 13 per cent in the overall company sales, up from 11 per cent in the previous year.
Besides, the company also sharpened its focus on new channels (e-commerce and hospitality). It is developing various products to cater to the hospitality segment (hotels, spas, resorts, cruise lines, and so on), the company’s hospitality business doubled during the year. In the e-commerce segment, WIL launched its online portal “www.shopwelspun.in” in India and “www.shopwelspun.com” in the US. It has also launched Christy products in the US through its e-commerce partners. These initiatives have resulted in attractive sales through new channels, touching five per cent of overall sales.
Not just delivering innovative products, the company also helps its customers in their supply chain management. Its dedicated data analytics team closely studies sales data from its customer stores to forecast future demand. This solution helps customers reduce inventory and increase inventory turns while minimizing stock-outs at the same time.
Welspun has announced Vision 2020 for $2 billion revenue which it aims to achieve in five years.
FY16 was the ‘Best Ever’ financial year for WIL with its recording the highest annual sales and profitability in its history. PAT crossed the Rs. 7 billion milestone during the year. The operating EBITDA margin also reached an all-time high, at 26%. The company generated free cash flows after meeting the year’s capex requirements.
Net sales stood at Rs. 59,795 million in FY16 compared to Rs. 53,025 million in FY15, registering a 13 per cent growth. This growth was driven by higher volumes across products, favourable exchange rate movement and higher mix of innovative and branded products.
Operating EBITDA in FY16 grew 22.2 per cent to Rs. 15,575 million, resulting in an EBITDA margin of 26 per cent from Rs. 12,742 million (margin 24 per cent) in the previous year. It was driven by higher vertical integration, a growing share of innovative and branded products and tighter cost control.
The reported EBITDA in FY16 was Rs. 16,490 million, a significant improvement compared to the FY15 figure of Rs. 13,691 million. Operating profit and margin during the year were the highest-ever achieved by the company. Profit after tax, post minority interest, stood at Rs. 7,029 million in FY16 compared to Rs. 5,398 million in FY15, representing 30.2 per cent y-o-y growth.