Axis Securities

Welspun India (Buy)

Target: ₹175

CMP: ₹147.25

Welspun India Ltd — a part of the Welspun Group of companies — is one of the largest Indian Home Textile companies. It has a strong export presence in the US and European markets with nearly 90 per cent of the revenues contributed by exports.

WIL offers a wide spectrum of Home & Technical textile products and flooring solutions. Over the years, the company has established itself as a thought leader in the home textile industry and continues to focus on growth enablers to further consolidate its leadership position.

The US ban on cotton products from the Xinjiang region (which accounts for 20 per cent of world cotton production), has substantially increased demand for Indian Textile products. Moreover, the Indian textile industry has been a key beneficiary of the US’ China + 1 strategy which intends to de-risk its reliance on the Chinese supply chain since the Covid-19 outbreak.

The company has also been benefiting from the rising trend of the Homebody Economy wherein the consumer spending pattern is shifting towards quality home utility products. Tailwinds such as strong government policy support further back our thesis.

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