Companies

Welspun India net down 7% on higher cost

Our Bureau Mumbai | Updated on October 30, 2020 Published on October 30, 2020

The new fully-integrated Welspun Flooring facility at Telangana will complement and strengthen the existing rugs and carpets manufacturing unit at Vapi

Panel of Independent Directors has said Welspun Flooring should continue as part of WIL in its formative years; so, company will not pursue the re-alignment plan

Welspun India (WIL) has reported that its net profit for the September quarter was down 7 per cent at₹188 crore against ₹203 crore in the same period last year, on the back of higher cost.

Income was up 8 per cent at ₹1,993 crore (₹1,837 crore).

Inventory was up sharply at ₹162 crore (₹13 crore), while overall expenses were up 10 per cent at ₹1,739 crore (₹1,582 crore).

Also read: Welspun Flooring looks to expand overseas presence

During the quarter, the company fully recovered from the impact of the Covid-19-induced lockdown and the plants worked at full capacity.

Ebitda during the quarter was flat at ₹405 crore, while it was up 70 per cent quarter on quarter.

Net debt was down at ₹2,380 crore against ₹2,962 crore in March, a reduction of ₹5,82 crore.

After due deliberation, the committee of Independent Directors suggested that Welspun Flooring should continue to be a part of WIL in its formative years. Hence, in line with the recommendation, the company has decided not to pursue the re-alignment plan.

Consumers are still reluctant to resume their normal ‘out of home’ activities and are spending more time at home which is driving the overall demand for home textile products.

With customer demand remaining buoyant and plants running at optimal capacity, the company plans to increase plant capacity by 20 per cent by de-bottleneck manufacturing processes and rebalancing the facilities.

The new fully-integrated Welspun Flooring facility at Telangana will complement and strengthen the existing rugs and carpets manufacturing unit at Vapi.

Also read: Welspun India Q1 net falls 65 per cent to ₹53.75 cr

The company expects the licensed brand and e-commerce business to clock revenue of $100 million each over the next two-three years.

The company will invest about ₹300 crore over the two years to enhance production capacity of spunlace and wet wipes and generate additional turnover of ₹400 crore at optimum capacity utilisation.

BK Goenka, Chairman, Welspun Group, said the company has delivered strong profitability, led by global recovery and easing of lockdown restrictions.

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Published on October 30, 2020
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