Welspun Living shares surge 8%; stock gains 14% in 3 days. What’s driving the rally?
The home-textile major reported a strong start to FY27, with revenue growth, a sharp jump in profitability and improving operating margins strengthening the outlook for the business.
Following the strong quarterly performance, brokerages Motilal Oswal Financial Services and JM Financial retained their ‘Buy’ ratings on the stock, citing improving business fundamentals and further earnings growth potential.
Welspun Living’s consolidated profit for the June quarter jumped 85% year-on-year (YoY) to Rs 161 crore, compared with Rs 87 crore in the same quarter last year. Revenue from operations increased 24% YoY to Rs 2,795 crore, compared with Rs 2,261 crore in the year-ago period.
JM Financial maintains ‘Buy’ rating
JM Financial remains positive on Welspun Living and has maintained its ‘Buy’ rating following the company’s stronger-than-expected Q1FY27 performance.
The brokerage highlighted that consolidated EBITDA of Rs 320 crore was well ahead of its estimate of Rs 280 crore. The outperformance was supported by better operating leverage and an improved product mix. EBITDA margin expanded by 151 basis points YoY to 11.5%, pointing to an improvement in the company’s operating efficiency.Motilal Oswal sees further upside
Motilal Oswal Financial Services has also reiterated its ‘Buy’ rating on Welspun Living, with a target price of Rs 215, indicating further upside from the stock’s current levels. The brokerage expects Welspun Living to sustain double-digit revenue growth as home-textile volumes recover. It also expects EBITDA margins to move towards 13%, aided by a better business mix and a recovery in flooring margins.
Motilal Oswal expects the core home-textile business to clock around 15% CAGR between FY26 and FY28. Bath is expected to lead growth with a high-teens expansion, followed by Bed and Rugs & Carpets. The emerging business is projected to grow at around 17%.
Stock performance
Welspun Living shares have delivered a strong performance over the past year, gaining around 45%. The stock currently has a market capitalisation of approximately Rs 15,886 crore. In Tuesday’s session, the stock touched a fresh 52-week high of Rs 182, reflecting the strong momentum following the Q1 results.
Technical indicators remain positive
On the technical front, the stock’s 14-day Relative Strength Index (RSI) stood at 57.4. An RSI below 30 is generally considered to indicate an oversold zone, while a reading above 70 is considered overbought. The broader trend also remains bullish, with Welspun Living trading above all eight tracked simple moving averages (SMAs).
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
