Welspun Living Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹219.95+₹3.15 (+1.45%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Welspun Living Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Welspun Living Limited manufactures and sells home textile products in India and internationally. It operates through two segments, Home Textiles and Flooring.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees35,000

Annual revenue₹8,436 Cr

How does it make money?

Turns over ₹8,436 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 35,000 employees supports ₹24.1 lakh of revenue a year, the signature of a people-led business.

EBITDA margin9.6%

Net margin2.4%

Revenue / employee₹24.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Little sign of one

Returns on capital of 5.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE5.8%

ROE4.2%

Peer median ROE25.9%

What is the outlook?

10 analysts covering the stock expect revenue to grow about 16.4% and earnings to grow about 43.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+16.4%

Est. earnings growth+43.9%

Analysts10

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +18% while net margin moved -13% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+18%

Margin effect-13%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 4.2% is weak

Quality vs. Valuation

Company Quality

47/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

33/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

75.8x

3Y Median

23.2x

40 monthly readings · mean 44.1x · range 15.1x–106.2x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 227% above its 3y median of 23.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 69.2x.

vs. its own history

Expensive

23.2x median over 40 months · +227%

vs. sector peers

Fair

69.2x median of 4 peers · +10%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

75.8x

P/B

4.29x

EV/EBITDA

28.3x

PEG

81.40

Dividend Yield

0.05%

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 51% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Margins are compressing
EBITDA margin has slipped from 11.6% to 9.6% over 3 years.
Valuation above its historical average
At 75.8x the stock trades 227% above its own median of 23.2x.

Red Flags

2 items require attention · 2 watch

🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.5x to 3.2x.
🟡Margins are compressingFinancial
EBITDA margin is down 2.0 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹724 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 11.6% to 9.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 227% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 5.7% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 8%✓ 9.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 5.7% CAGR
Latest reported year was 23.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹724 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹20,707 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

75.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.29x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.9

Profitable

Profitable on a per-share basis

ROE

4.2%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

0.47x

Low

Conservative leverage

Revenue Growth (YoY)

23.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

83.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.05%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹724 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹219.95

P/E (Forward)

23.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.5%

Average

Average margins

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.58

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.22

Defensive

Steadier than the market

52W Range Position

82%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

225.7 / 203.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,146 Cr	₹8,621 Cr	₹9,479 Cr	₹8,436 Cr	+5.7%
EBITDA	₹832 Cr	₹1,475 Cr	₹1,407 Cr	₹809 Cr	-0.9%
EBITDA Margin	11.6%	17.1%	14.8%	9.6%	—
PAT (Net Profit)	₹199 Cr	₹681 Cr	₹639 Cr	₹204 Cr	+0.9%
EPS	₹2.02	₹7.06	₹6.68	₹2.14	+1.9%
ROE	4.9%	15.1%	13.3%	4.2%	—
ROCE	6.8%	16.9%	14.9%	5.8%	—
Total Debt	₹2,462 Cr	₹2,632 Cr	₹2,762 Cr	₹2,315 Cr	-2.0%
Free Cash Flow	₹481 Cr	₹257 Cr	-₹25 Cr	₹724 Cr	+14.6%

🟢 Revenue has grown at 5.7% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-0.9% a year).

🔴 EBITDA Margin has fallen from 11.6% to 9.6% over 3 years (-2.0 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (0.9% a year).

🟡 EPS has been broadly flat over 3 years (1.9% a year).

🟡 ROE has held roughly flat at 4.2% over 3 years.

🟡 ROCE has held roughly flat at 5.8% over 3 years.

🟢 Total Debt has shrunk at 2.0% a year over 3 years.

🟢 Free Cash Flow has grown at 14.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10,455 Cr

Total Liabilities

₹5,477 Cr

Total Debt

₹2,315 Cr

Cash & Equivalents

₹138 Cr

Operating Cash Flow

₹1,175 Cr

Capex

-₹451 Cr

Shareholding (proxy)

Institutional Holding

15.0%

Insider Holding

69.0%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

10 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹218.09

-0.8% vs CMP

Target Range

₹156 – ₹285

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

4 mixed2 general

Welspun Living zooms 112% in 6 months, hits new high; what's driving stock?

Business Standard, 01 Oct

Welspun Living shares surge 8%; stock gains 14% in 3 days. What’s driving the rally?

The Economic Times, 18 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

WELSPUNLIV Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Welspun Living Share Price Jumps Nearly 4%. Here's Why

NDTV Profit, 23 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Welspun Living shares gain 3% after strong Q1, brokerages retain buy, hits fresh high intraday

BusinessLine, 14 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Buy Welspun Living; target of Rs 215: Motilal Oswal

Moneycontrol.com, 14 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong16.3/20

🔴GrowthWeak7.4/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding4.9/15

🟡RiskModerate4.9/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

This thesis breaks if

✓EBITDA margin holds above 8%9.6%
✗Debt / EBITDA stays below 2x2.9x
✓Interest cover stays above 3x3.2x
✓Revenue growth stays above 4% a year5.7% CAGR
✓Free cash flow remains positive₹724 Cr