Welspun India Q2 sales 8.2% higher at Rs1974cr, but profits lower
Welspun India reported growth of 8.15% in top line sales for the Sep-20 quarter at Rs1,973.66cr. The operating profits for the quarter ended Sep-20 was down 2.08%
Oct 30, 2020 07:10 IST India Infoline News Service
Welspun India reported growth of 8.15% in top line sales for the Sep-20 quarter at Rs1,973.66cr. The operating profits for the quarter ended Sep-20 was down 2.08% at Rs270.99cr while net profits were also down 7.26% at Rs187.90cr on the unfavourable inventory movements.
This had an overall impact on the margins of Welspun India. For the Sep-20 quarter, the operating profit margins or OPM was down around 140 bps at 13.73%. Similarly, the net profit margins or NPM for the quarter was also lower by over 155 basis points at 9.52% on the back of higher inventory costs as well as higher tax incidence in the quarter.
Financial highlights for Sep-20 compared yoy and sequentially| Rs in Crore | Sep-20 | Sep-19 | YOY | Jun-20 | QOQ |
| Revenues | 1,973.66 | 1,824.92 | 8.15% | 1,201.80 | 64.23% |
| Operating Profit | 270.99 | 276.75 | -2.08% | 113.29 | 139.20% |
| Net Profits | 187.90 | 202.60 | -7.26% | 53.75 | 249.58% |
| Diluted EPS (Rs) | 1.79 | 1.98 | 0.49 | ||
| OPM | 13.73% | 15.17% | 9.43% | ||
| Net Margins | 9.52% | 11.10% | 4.47% |
Key takeaways from the Sep-20 quarter results
- The post-COVID recovery was evident from the fact that the home textiles segment grew by 6% on a yoy basis but a whopping 62% on a qoq basis. During the quarter, the company recorded the highest ever bed sheets volumes.
- The net debt of the company reduced by Rs623cr during the quarter improving the coverage ratios in the process. With work from home likely to continue for more time, Welspun expects its hygiene related products to see a good demand in the coming quarters.
