Welspun Living Ltd (WELSPUNLIV) Q1 FY27 Earnings Call: Revenue Jumps 23.5% YoY, Guides Double-Digit Revenue Growth

Welspun Living Ltd held its Q1 FY27 earnings call on August 13, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

"Strongest Quarter in Recent Years"

• Consolidated revenue of Rs.2,828 Cr — up 23.5% YoY and 15.4% QoQ in Q1 FY 2026-2027, described by management as the "strongest quarter in recent years" for Home Textiles exports.
• EBITDA margin expanded to 12.5% — up 140 bps YoY and 170 bps QoQ, marking the third consecutive quarter of margin improvement, driven by volume recovery, operating leverage, and better business mix.
• PAT nearly doubled — PAT margins improved from 3.8% to 5.7% in Q1 FY 2026-2027.
• Revenue 9% above pre-tariff baseline — Q1 FY 2026-2027 revenue is 9% above the same quarter of FY 2025-2026, showing the business is "ahead" of where it was before tariff disruptions.
• Home Textiles exports grew 28.1% YoY — the strongest quarterly performance in recent years, with Home Textiles revenue mix reflecting both volume and value gains.
• Gross margin declined in Q1 FY 2026-2027 — due to raw material inflation (cotton and crude derivatives), with near-term margin expected to remain in a similar range for the next couple of quarters.

Broad-Based Growth Across Verticals

• Flooring EBITDA margin "materially improved" to 10.4% — the highest in over two years, driven by a strategic shift toward soft flooring and new partnerships; management guided that this ~10% margin level is sustainable for the full year FY 2026-2027.
• India domestic business grew 21.3% YoY — both B2B and B2C segments delivered "strong double digits" in Q1 FY 2026-2027; the domestic retail business (Welspun and Spaces) is near break-even.
• US onshore pillow business grew 2.3x in Q1 FY 2026-2027 — the Ohio facility is at 81% utilization, and a Nevada facility has "commenced operations." Management is on track to double revenue in the US onshore business to reach USD 60 million in FY 2026-2027.
• Bed linen utilization at 60% in Q1 FY 2026-2027 — management expects annual utilization across all categories (towels, sheets, rugs) to reach 80% in FY 2026-2027.
• Innovation-led sales contributed ~25% of total revenue — growing 16% in Q1 FY 2026-2027, underscoring the company's focus on differentiated product offerings.
• Bath volume grew 2% and bed volume declined in Q1 FY 2026-2027 — a 50–60 day dispatch lag impacted quarter figures, with realization factors also affecting reported revenue.

Operating Leverage Offsets Raw Material Headwinds

• EBITDA margin expansion driven by volume recovery and cost discipline — management cited operating leverage, improved business mix, and sustained cost optimization as key levers, with Q1 FY 2026-2027 margin at 12.5%.
• Raw material cost pass-through implemented and ongoing in Q1 FY 2026-2027 — cotton and crude derivative inflation is being passed on to customers; pass-through has already been executed and continues.
• Current US tariff level at 10% — management stated that past tariff spikes of "25% to 50%" were managed collaboratively with retail partners, and the 10% impact has already been passed to consumers without retraction.
• US retail sales grew 5.2% YoY in May 2026 — healthy consumer sentiment across Father's Day, Mother's Day, and back-to-college seasons; footfalls at key retailers increased, supporting demand for home textiles.
• Container availability not an issue for Welspun — unlike some peers, the company's long-term freight carrier partnerships ensured no disruption, though higher market rates were absorbed without impacting customer dispatches.
• Tariff refund process progressing — eligible claims initiated with refunds starting, subject to administrative completion per the regulatory framework.

UK FTA, US Onshore, and Geographic Diversification

• The India-UK Free Trade Agreement, effective July 15, 2026 — management noted the FTA positions India on an equal tariff footing with Pakistan, and expects "double-digit growth" in UK businesses "over the coming years." UK and Europe already delivered 20%+ growth in Q1 FY 2026-2027.
• Medium-term target to increase non-US revenue share from 41% to 50% — growth contributions expected from the UK (a market where Pakistan holds ~50% share), Europe, Japan, and India, as stated in management's geographic diversification strategy.
• Global brand business grew 27% YoY — management targets a scale of USD 100 million for the global brand business, with B2B remaining the core growth pillar.
• Sleep ecosystem focused on pillows; FY 2026-2027 revenue target of USD 60 million — the Nevada facility has commenced operations, and the Ohio facility is at 80% utilization for pillow production.
• Focus on mid-to-better-best price categories — as non-US geographies (structurally lower-margin) gain share, management aims to sustain profitability by protecting margins through premium positioning rather than opening price points.

Investment, Disruption, and FY 2026-2027 Guidance

• FY 2026-2027 capex guidance maintained at Rs.400–500 Cr — primarily for automation, modernization, and debottlenecking. The Board approved a Rs.121 Cr debottlenecking and modernization project at the Anjar facility in July 2026.
• De-bottlenecking capex of ~Rs.120 Cr expected to add 10–20 tons per month — in processing and volume during FY 2026-2027, with an additional Rs.400–500 Cr under consideration for further de-bottlenecking (period unspecified).
• Management targets double-digit revenue growth for full FY 2026-2027 — maintaining the growth rate seen in Q1, with full-year EBITDA margins targeting low-to-mid teens. Near-term (including Q2 FY 2026-2027) margins expected in the low teens.
• RoCE improvement targeted to low teens during FY 2026-2027 — driven by margin expansion and efficient capital deployment.
• Vapi flooding incident impacted Q2 FY 2026-2027 — "unprecedented flooding" at the Vapi facility; all personnel evacuated safely. Operations partially resumed within a week; full restoration expected in a phased manner by Q3/Q4 FY 2026-2027. The company is "fully insured."
• Rostel export incentive scheme set for termination by September 2026 — management expressed hope for a favorable extension ("Rostel export incentive scheme... set for termination by September 2026") but provided no concrete guidance. Any negative outcome would be borne industry-wide.
• No spillover from Q4 FY 2025-2026 into Q1 FY 2026-2027 revenue — management confirmed the quarter's performance was organic, with no carryover benefit from the prior period.