WELSPUNLIV - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 3.4

📊 Fundamental Analysis

Valuation

P/E Ratio: 28.1 vs Industry PE of 22.8 — moderately overvalued.

PEG Ratio: 3.26 — high, indicating earnings growth may not justify the current valuation.

Price to Book: ~3.16 — fair for a consumer-focused business, but not cheap.

Profitability

ROCE: 13.8% and ROE: 13.2% — decent, but not exceptional for long-term compounding.

EPS: ₹4.50 — modest earnings base.

Quarterly PAT Decline: ₹98.2 Cr. to ₹76.0 Cr. — ~22.6% drop, and YoY decline of 47.6% is concerning.

Dividend Yield: 1.34% — respectable, adds some income cushion.

Debt to Equity: 0.43 — moderate leverage, manageable but worth monitoring.

📈 Technical & Trend Indicators

DMA 50 / DMA 200: ₹124 / ₹135 — current price is above 50-DMA but below 200-DMA, indicating short-term strength but long-term weakness.

RSI: 59.0 — neutral to slightly bullish.

MACD: 0.79 — mildly bullish crossover.

Volume: Below average — suggests waning market interest.

52W Index: Trading at ~26.5% of its 52-week high — deep correction, potential value zone forming.

💡 Ideal Entry Price Zone

Entry Zone: ₹115–₹122**

This range offers proximity to technical support and better valuation comfort.

Avoid entering above ₹135 unless earnings growth reaccelerates or PEG improves.

🧭 Exit Strategy & Holding Period

If you already hold WELSPUNLIV (Welspun Living Ltd)

Holding Period: 2–4 years — suitable for moderate growth and dividend income.

Exit Strategy

Fundamental Trigger: Exit if ROE drops below 10% or PEG remains above 3.0 for 2+ quarters.

Technical Trigger: Consider trimming if price nears ₹180–₹185 without earnings support.

Re-entry Zone: ₹105–₹115 with signs of improving profitability and volume support.

🧠 Final Verdict

Welspun Living is a moderate-risk value candidate with decent profitability and a healthy dividend yield, but its high PEG ratio and earnings volatility limit long-term conviction. Best suited for investors seeking exposure to branded home textiles with a medium-term horizon.

Let me know if you'd like a peer comparison or sector outlook.

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