WELSPUNLIV - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | WELSPUNLIV | Market Cap | 12,369 Cr. | Current Price | 129 ₹ | High / Low | 155 ₹ |
| Stock P/E | 39.1 | Book Value | 42.2 ₹ | Dividend Yield | 1.32 % | ROCE | 13.8 % |
| ROE | 13.2 % | Face Value | 1.00 ₹ | DMA 50 | 125 ₹ | DMA 200 | 129 ₹ |
| Chg in FII Hold | -0.04 % | Chg in DII Hold | 0.75 % | PAT Qtr | -5.33 Cr. | PAT Prev Qtr | 148 Cr. |
| RSI | 55.9 | MACD | 3.05 | Volume | 7,36,500 | Avg Vol 1Wk | 10,91,002 |
| Low price | 107 ₹ | High price | 155 ₹ | PEG Ratio | 4.52 | Debt to equity | 0.41 |
| 52w Index | 46.0 % | Qtr Profit Var | -106 % | EPS | 3.25 ₹ | Industry PE | 20.2 |
📊 Financials: WELSPUNLIV shows moderate efficiency with ROCE at 13.8% and ROE at 13.2%. Debt-to-equity ratio is relatively high at 0.41, indicating leverage risk. EPS of ₹3.25 supports earnings base, but quarterly PAT swung sharply negative (-₹5.33 Cr vs ₹148 Cr), highlighting volatility. Dividend yield of 1.32% adds some shareholder value.
💹 Valuation: Current P/E of 39.1 is nearly double the industry average (20.2), suggesting stretched valuation. PEG ratio of 4.52 indicates expensive growth prospects. P/B ratio (~3.05) is elevated relative to book value. Intrinsic value appears lower than current price, limiting margin of safety.
🏢 Business Model & Advantage: WELSPUNLIV operates in textiles/home furnishings, benefiting from brand presence and export demand. Competitive advantage lies in product diversification and domestic institutional support, though earnings volatility undermines stability.
📈 Entry Zone: Safer accumulation near ₹115–₹120 (below DMA 200 support). Current price (₹129) is near resistance levels, with upside capped at ₹155.
⏳ Long-Term Holding: Suitable only for cautious investors with a 2–3 year horizon. Long-term holding requires earnings stabilization and valuation normalization. Partial profit booking advised near ₹150–₹155 resistance.
Positive
- Moderate ROCE (13.8%) and ROE (13.2%)
- Dividend yield of 1.32% adds investor appeal
- DII holdings increased (+0.75%)
- Neutral RSI (55.9) indicates balanced momentum
Limitation
- High P/E (39.1 vs industry 20.2)
- PEG ratio of 4.52 signals expensive growth
- Debt-to-equity ratio of 0.41
- Quarterly PAT turned negative (-₹5.33 Cr)
Company Negative News
- Sequential profit decline highlights earnings volatility
- FII holdings reduced (-0.04%), showing foreign investor caution
Company Positive News
- DII inflows (+0.75%) reflect domestic institutional confidence
- Dividend yield supports shareholder returns
Industry
- Textile/home furnishing sector trading at PE ~20.2
- WELSPUNLIV trades at a premium, raising correction risk
Conclusion
WELSPUNLIV is a momentum-driven candidate with moderate fundamentals and strong sector positioning, but valuations are stretched and earnings volatility is a concern. Entry is safer near ₹115–₹120, with exits near ₹150–₹155. Long-term holding requires risk-managed exposure and monitoring of profitability trends.