InvestorQ : How do you see the latest quarter results of textile home needs maker, Welspun India?
Dia Deshpande made post

How do you see the latest quarter results of textile home needs maker, Welspun India?

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swati Bakhda answered.
5 months ago
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The net profits of Welspun India more than doubled on a yoy basis at Rs.175 crore helped on better fixed cost absorption by higher sales revenues. The total sales for the Dec-20 quarter were up by 29.18% at Rs.2,029 crore. Both the key product verticals of home textiles and flooring items were up sharply in terms of revenue performance. Welspun achieved the highest the highest ever volumes on bath linen, rugs and carpets.

Operating profits were up nearly four-fold at Rs.284 crore. Operating profit improvement came due to control over the key input costs and smarter inventory management. As a result, the OPM expanded from 4.60% in the Dec-19 quarter to 14.00% in Dec-20 quarter. PAT for the Dec-20 quarter was up 133% at Rs.175 crore even PAT margins improved from 4.78% in Dec-19 to 8.62% in Dec-20.

The good news is that net debt of the company reduced by Rs.535 crore to Rs.1,789 crore as the company tries to reduce debt and improve its solvency ratio. There are also expansion plans in the anvil as Welspun India plans to invest Rs.225 crore over next 2 years to expand towel capacity by 7%, bed linen by 20%, rugs and carpets capacity by 80% apiece to achieve better economies of scale.

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