Welspun Living shares gain 3% after strong Q1, brokerages retain buy

Welspun Living’s EBITDA margin improved to 12.5 per cent, up 140 basis points y-o-y and 170 basis points sequentially.

Welspun Living shares closed with nearly 3 per cent gains after hitting a fresh 52-week high after the company reported strong Q1 results.

The stock closed 2.65 per cent positive at ₹164.06 on the NSEafter hitting a 52-week high of ₹178 compared to the previous closing level of ₹159.83.

During the quarter under review, the consolidated total income grew 23.5 per cent y-o-y to ₹2,828 crore, while EBITDA stood at ₹354 crore, with the margin improving for the third consecutive quarter.

Welspun Living’s EBITDA margin improved to 12.5 per cent, up 140 basis points y-o-y and 170 basis points sequentially.

Motilal Oswal expects Welspun’s core home textiles business to improve and grow at a 15 per cent CAGR over FY26-28, driving a better margin mix. Within home textiles, Bath is expected to grow in the high-teens, followed by high-single-digit growth in Bed and Rugs & Carpet.

The brokerage expects the emerging business to grow at 17 per cent over the next couple of years. It expects revenue, EBITDA and PAT CAGR of 15 per cent, 44 per cent and 101 per cent, respectively, over FY26-28, led mainly by growth in the emerging business, followed by the home textile portfolio.

Motilal Oswal raised its earnings estimates, citing better visibility, and reiterated its buy rating with a target price of ₹215. Key risks include customer and geographical concentrations, and commodity price movements.

JM Financial said capacity utilisation across segments is expected to remain above 80 per cent in FY27, aiding operating leverage. It said the US Pillow business remains on track to double revenue to around US$60 million, with Ohio above 80 per cent utilised and Nevada fully operational since Jun’26.

JM Financial expects UK business growth to remain in double digits, aided by the India-UK FTA and strong customer relationships. Flooring margin is expected to sustain above 10 per cent as the company increases its focus on soft flooring through partnerships.

The brokerage said near-term gross margin could remain range-bound amid elevated raw-material costs, while Q2FY27 would see some impact from the Vapi floods, with management expecting Q3/Q4FY27 to remain unaffected. JM Financial maintained its buy rating with ₹205 as TP.

Axis Securities maintained its buy rating and said Welspun Living remains confident of sustaining its operating momentum in FY27, targeting double-digit revenue growth and low-teens EBITDA margins, with a medium-term ambition of 15 per cent-plus margins.