WELSPUNLIV - Investment Analysis

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

Investment Rating: 3.4

🧵 Fundamental Analysis of Welspun Living Ltd (WELSPUNLIV)

✅ Positives

Decent Profitability

ROCE: 14.4%, ROE: 13.7% — acceptable but not exceptional

EPS: ₹6.58, with stable quarterly profits

Reasonable Valuation

P/E: 20.7 vs Industry PE: 27.8 — slightly undervalued

Dividend Yield: 1.25% — better than peers, adds passive income

Book Value: ₹49.6 vs Price: ₹136 — ~2.7x book, fair for consumer textiles

Technical Setup

RSI: 45.1 — nearing oversold zone, potential for rebound

MACD: -0.49 — mild bearish signal, but not deeply negative

Price near DMA 50 & 200 — consolidation zone, possible base formation

⚠️ Concerns

PEG Ratio: 10.6 — extremely high, suggests overvaluation relative to growth

Debt-to-Equity: 0.57 — moderate leverage, needs monitoring

FII Hold ↓ 0.60% — foreign investors reducing exposure

Volume Drop — current volume well below 1-week average, waning interest

52W Index: 29.0% — significant drawdown from highs, weak momentum

📉 Ideal Entry Price Zone

Entry Zone: ₹120–₹130

Closer to support levels and below moving averages

Offers better risk-reward if fundamentals stabilize

🧭 Long-Term Investment Outlook

Welspun Living operates in home textiles and consumer goods — a cyclical but brand-driven space. While the company has decent fundamentals, its growth metrics do not justify the current valuation, especially with a PEG ratio of 10.6.

Holding Period: 1–2 years

Reassess if ROE improves to >15% and PEG drops below 2.0

Watch for margin expansion and export growth

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹150–₹160

Near resistance and psychological round numbers

Full Exit

If PEG remains >8.0 for 2+ quarters

If ROE drops below 12% or debt increases

If price breaks below ₹120 and fails to recover

Reinvest: Only if PEG improves and ROE crosses 15% with volume confirmation

Would you like a sector comparison with other textile players like Trident, Himatsingka, or Indo Count to assess competitive positioning?

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