WELSPUNLIV - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.4

Welspun Living (WELSPUNLIV) is a home textile and lifestyle brand with a solid financial backbone and modest returns, though its valuation metrics and growth pace suggest cautious optimism rather than aggressive enthusiasm.

💼 Core Financial Overview

Return Metrics

ROE: 13.7%, ROCE: 14.4% — decent profitability, though not exceptional

EPS: ₹6.58 — moderate earnings relative to price and market cap

Profit Performance

PAT Growth: ₹121 Cr → ₹132 Cr — marginal improvement (+0.97% QoQ) suggests subdued growth phase

Debt Profile

Debt-to-Equity: 0.57 — manageable, though edging into moderate range

Dividend Yield: 1.25% — income investors get some cushion

📊 Valuation Check

Metric Value Interpretation

P/E Ratio 20.7 Below industry average (27.8) → fairly valued to mildly discounted

P/B Ratio ~2.74 Acceptable considering earnings power and asset quality

PEG Ratio 10.6 ⚠️ Very high → indicates valuation may be far ahead of actual growth

📉 PEG Ratio warning: such a high value suggests low forward growth expectations or overpricing relative to recent profit expansion.

🏢 Business Model & Positioning

Core Focus: Textile-based lifestyle products and home furnishings (bedsheets, towels, etc.)

Strengths

Established brand recognition, export capability

Institutional stability — DII increased by +0.31%

Challenges

FII reduced by -0.60% — foreign sentiment softening

Sluggish profit growth with inflated PEG and falling volumes

Demand sensitivity to macro cycles and discretionary spending

📈 Technical Sentiment

RSI: 45.1 — nearing oversold zone, could signal short-term rebound

MACD: -0.49 — weak momentum, trend may be pausing

DMA Levels

Below both 50-DMA (₹139) and 200-DMA (₹142) — bearish undertone

Volume dipped sharply — indicates waning interest

🎯 Entry Zone & Investment Guidance

Entry Zone: ₹125–₹135 — watch for dips below current price and RSI reversal

Target (12–15 months): ₹155–₹165 — realistic if margins improve or exports revive

Investor Type Fit

Suited for defensive portfolios seeking modest income

May not excite growth or deep-value investors given weak PEG and flat earnings

If you'd like to explore margin expansion scenarios or map demand recovery for textile players post festive cycle or global macro trends, I can help simulate those models. Or we could pit Welspun against peers like Trident or Himatsingka — fancy doing a textile stock showdown? 🧵📊

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