welspun india ltd Management discussions

Economy Review

Global Economy and Outlook

The global economy grew at an estimated rate of 6.1% in 2021, delivering a strong rebound from 3.1% decline in 2020. This was driven by ramp-up of vaccination drives, release of pent-up demand, and accommodative fiscal and monetary stance by central banks globally. By the latter part of the calendar year 2021, however, inflationary pressures were visible, led by an uptrend in the prices of several key commodities. The global economys growth is projected to soften over the coming year, as pent up demand gradually settles down and monetary policies shift in response to factors such as inflation. With a major crisis brewing in eastern Europe, further economic disruptions might occur if the situation escalates and these too may affect global economic outlook.

On the positive side, the impact of the Omicron variant has been contained worldwide, thanks to extensive immunisation campaigns that noticeably reduced the spread of the virus. However, due to higher fuel and energy prices, the resulting increase in inflation, ongoing supply chain challenges, and subdued consumer sentiment are likely to moderate the global economic outlook. The ongoing Russia-Ukraine conflict has further exacerbated the situation. Central banks have already tightened monetary policies to rein in inflation and more such responses are likely in the future.

Year over Year


2020 2021 2022 2023
World Output -3.1 6.1 3.6 3.2
Advanced Economies -4.5 5.2 3.3 2.4
United States -3.4 5.7 3.7 2.3
Euro Area -6.4 5.3 2.8 2.3
Germany -4.6 2.8 2.1 2.7
France -8.0 7.0 2.9 1.4
Italy -9.0 6.6 2.3 1.7
Spain -10.8 5.1 4.8 3.3
Japan -4.5 1.6 2.4 2.3
United Kingdom -9.3 7.4 3.7 1.2
Canada -5.2 4.6 3.9 2.8
Other Advanced Economies1 -1.8 5.0 3.1 3.0
Emerging Market and Developing Economies -2.0 6.8 3.8 4.4
Emerging and Developing Asia -0.8 7.3 5.4 5.6
China 2.2 8.1 4.4 5.1
India2 -6.6 8.9 8.2 6.9
World Trade Volume (goods and services) -7.9 10.1 5.0 4.4
Advanced Economies -8.7 9.5 6.1 4.5
Emerging Market and Developing Economies -7.9 11.8 3.9 4.8
Advanced Economies -9.1 8.6 5.0 4.7
Emerging Market and Developing Economies -4.8 12.3 4.1 3.6
Commodity Prices (US Dollars)
Oil4 -32.7 67.3 54.7 -13.3
Nonfuel (average based on world commodity import weights) 6.8 26.8 11.4 -2.5
Consumer Prices
Advanced Economies5 0.7 3.1 5.7 2.5
Emerging Market and Developing Economies6 5.2 5.9 8.7 6.5

Source: IMF, World Economic Outlook, 2022

Note: Real effective exchange rates are assumed to remain constant at the levels prevailing during February 7, 2022-to March 7, 2022. Economies are listed on the basis of economic size. The aggregated quarterly data are seasonally adjusted.

Excludes the Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.


2For India, data and forecasts are presented on a fiscal year basis, and GDP from 2011 onward is based on GDP at market prices with the fiscal year 2011/12 as a base year.

Indonesia, Malaysia, Philippines, Thailand, Vietnam


4Simple average of prices of UK Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in US dollars a barrel was USD69.07 in 2021; the assumed price, based on futures markets, is USD106.83 in 2022 and $92.63 in 2023.


5The inflation rates for 2022 and 2023, respectively, are as follows: 5.3% and 2.3% for the euro area, 1.0% and 0.8% for Japan, and 7.7% and 2.9% for the United States.


6Excludes Venezuela.

Indian Economy and Outlook

Indias recovery is gaining momentum and the GDP is projected to grow at 8.2% in 2022, despite the disrupting second wave of COVID-19. This growth will be supported by increased public investment in infrastructure and a pickup in private investment. Inflation during the year under review has been high but within a tolerable range, and might ease if commodity prices soften and supply chain disruptions are overcome. The nations financial markets remained strong and capital inflows continued to support the build-up in reserves. The country effectively tided over a third wave of COVID-19 with limited adverse impact, which is attributable to comprehensive vaccinations and timely policy changes.

The global economy, however, is not as buoyant and the financial environment is much more volatile, with a conflict unfolding in Eastern Europe. Multiple sanctions by several Western countries against Russia is seen to have implications for the broader economy across nations. Encouragingly, Indias economic and trade relations with Russia largely remain less impacted with India retaining its ability to import Russian crude.

The RBI is likely to act if increases in global commodity prices feed into core prices, as evident from the rate hike it affected in May 2022. The government too has been taking measures to invest more in social and physical infrastructure. Reducing unnecessary regulation in product and labour markets, further divestments in non-strategic sectors following the successful sale of Air India, and restructuring of state- owned banks is expected to help on the fiscal deficit front, boost investment, and support job creation.

Industry Review

Global Retail Industry

The global retail industry, which is estimated to represent 31% of the worlds GDP and employs more than a billion people, witnessed a recovery in the year 2021 after a severe setback in 2020. This rebound in the industry appeared to sustain well into early CY2022 as well and according to advance retail estimates from the US Department of Commerce released in April 2022, the US retail trade & food services sectors grew by 12.9% year-on-year between January and March 2022. In the same period, the furniture & home furnishings sector is reported to have grown by 5.8% year-on-year. However, with persistent inflation and the resulting adverse impact on consumer sentiment, a deceleration is visible in the retail sectors growth. In addition to that, a high base effect from the sharp pick-up in the preceding year as well as shifts in consumer spending patterns too are getting reflected in the industrys performance now.

Due to the after-effects of the pandemic, businesses in the retail industry across the globe have also been forced to recalibrate their organisations, business strategies and even goals. As a result, a much anticipated retail reset appears to be finally taking shape, even if it has been orchestrated by a pandemic. This reset should help many retailers achieve stability and potentially greater profits than witnessed in the past. To actualise this reset, companies would need to continue their remediation journey, which they undertook at the beginning of the pandemic.

The calendar year 2022 presents opportunities to restructure dated supply chain mechanisms, right size inventory management, review pricing, revisit promotional cadences, and reinvent the physical store. This will require major transformational thinking and long-term commitments from retailers, but these efforts can potentially change the way retail businesses are conducted. Technology has reshaped the retail industry with e-commerce becoming a significantly growing segment, a trend that is likely to sustain.

Retail Industry Trends and Priorities

• Greater focus on workforce development: Labour has always been a sticky concern for retailers. Effective hiring and retention of employees remains a key priority for companies in the sector globally. Retail, being a human resource-intensive industry, will continue to need significant investments in workforce development.

• Building resilient supply chains: Consumer priorities have changed in the last two years, and the pattern is often not easily predictable. Therefore, companies are migrating to more credible models and systems to handle such diverse scenarios.

• Joining the digital revolution: As consumers continue to strengthen their reliance on technology and digital platforms, retailers and their partners will have to make investments in order to address opportunities in the e-commerce space. With the digitisation of the physical world, effective deployment of automation and digital strategies is becoming pivotal.

Textile and Apparel Industry

The global apparel industry contracted from USD 1.6 trillion in 2019 to USD 1.3 trillion in 2020, a decline of about 22%. However, in 2021 the market recovered and grew about 16% to reach USD 1.5 trillion. This industry is expected to reach approximately USD 2 trillion in 2025, growing at a CAGR of 4% from 2019.

Global Apparel Market ($ billion)

Values in US$ billion

Region 2019 2020 2021 CAGR 2019-21 Projected CAGR 2019-21 2025 (P)
EU-27 264 219 211 11% 1% 280
United States 235 176 257 5% 2% 265
China 184 166 188 1% 11% 340
Japan 101 81 78 12% 0.5% 105
India 78 55 72 -4% 10% 135
Brazil 48 34 39 -10% 4% 60
Canada 25 20 22 -6% 7% 37
RoW 690 517 600 -7% 2% 780
World 1625 1269 1467 5% 4% 2,002

Source: Wazir Advisors

Textiles is a steadily growing industry with key players concentrated in India, China, the European Union, and the United States. Other countries such as Vietnam and Bangladesh have also emerged as significant contributors to this industry. China is one of the worlds leading producers and exporters of raw textiles and apparel. The United States is a major producer and exporter of raw cotton and also the largest importer of raw textiles and apparel. The European Unions textile market is led by Germany, Spain, France, Italy and Portugal, together accounting for more than one-fifth of the worlds textile market. India is estimated to have the worlds third-largest textile industry. Factors like newer technologies and state-of-the-art equipment have enabled the textile industry to become more efficient and productive over the years.

The performance of the textile industry during the financial year under review reflects the implications of the COVID-19 pandemic. The headwinds were particularly high in countries where the textile industry accounted for a larger share of the exports, given the disruptions in logistics and rise in ocean freight costs. During FY22, the industry also suffered due to a sharp increase in prices of cotton, fuel and energy, and other raw material.

Indian textile and apparel industry

The size of the Indian domestic textile and apparel (T&A) market is estimated at US$ 99 billion during FY22, an increase of about 30% from FY22. The market is expected to recover and grow at around 10% CAGR from 2019-20 to reach US$ 190 billion by 202526. Apparel constitutes ~74% share of the total T&A market in India while Home Textiles constitutes ~19%. Home Textiles as a segment is projected to grow at 23% CAGR from 2021 to reach US$ 42 billion by 202526 and constitute 22% of the total T&A market in India.

Indias T&A exports were USD 44.4 billion in FY22, a growth of 41%, as per Ministry of Textiles, Government of India. These exports are expected to touch USD 60 billion in FY22.

India benefits from a multitude of factors such as abundant availability of raw materials including cotton, wool, silk and jute, along with the availability of a large pool of skilled manpower and a large ancillary industry. It also enjoys the benefits of being a low cost producer compared to other major textile producing countries.

Home Textiles Industry

The global home textiles industry is projected to reach US$151.8 billion in size by 2025 from US$123.2 billion in 2019, registering a CAGR of 3.5% during the period (2019-2025). The United States and Europe are the largest consumers, receiving 60% of household textile imports, with countries such as India, China and Pakistan being major suppliers.

While in the near-term the home textiles industry is likely to face considerable challenges from macroeconomic headwinds such as high cost of raw material and supply chain disruptions, it does benefit from being a key component of consumer spending as well as increasing recognition among policy makers and governments as a high employment-generating sector, which in many geographies including India has resulted in supportive policies and incentives.

Bed Linen and Bed Spreads

The bed linen market is expected to surpass USD 35.81 billion by 2028, as reported in a research study by Global Market Insights Inc. The duvet covers segment is estimated to reach around USD 13 billion by 2028, growing at a CAGR of 6.1%. The firm demand for bed linen in residential and commercial buildings globally is expected to spur this segments growth. A rapidly growing hospitality industry and increased spending in developing countries are anticipated to offer incremental growth opportunities in this segment to the industry.

Bath and Toilet Linen

The US and Europe are two significant importers of bathroom linen products from Asia, and manufacturers tend to have strong tie-ups with global retailers. The bathroom linen market is expected to sustain a healthy grow rate over the next few years, with substantial contribution anticipated from the bath towels segment. A bath towel is an essential bathroom product, unlike many other accessories. As a result, the demand for bath towels tends to remain high. Moreover, the rise in online sales and innovative product offerings by manufacturers are all expected to drive the market for bath towels going forward. Personalised towel offerings are expected to be a key trend in the marketplace. Innovative bathroom linen products, assuring both superior quality and comfort, tend to generate high demand among discerning customers worldwide.

Indias presence across Key Global Home Textiles Markets

Indias Towel and Bed Linen Market Share in the USA

India enjoys a significant share in the global cotton home textile market, due to abundant cotton availability and competitive costs. According to the US Office of Textiles and Apparels (OTEXA), India catered to about 44% of the imported cotton towel demand in the United States in the calendar year (CY) 2021, a share that has grown significantly over recent years.

On a year-on-year basis Indias market share in the cotton terry towels segment has grown by 200 basis points to 44% during the calendar year 2021 from 42% share during the preceding twelve months (CY2020).

In the cotton sheets segment, the country supplied about 57% of the total import to the US in CY2021, which represents an approximately 500 basis points gain in market share over the preceding year.

Indias Towel and Bed Linen Market Share in Europe

Europe is almost as big a market as the United States for these products, but Indian players have a lower market penetration in Europe due to tariff disadvantages compared to countries such as Pakistan, Turkey, and Bangladesh that are able to avail tariff priorities from the European Union (EU). Indian exporters pay about 9%-10% duty on home textiles products exported to the EU, whereas some of the key competing countries have zero duty access to that market. Any substantial reduction in duties on Indian exports can therefore open up a huge market for Indian players. While India is in discussions with the European Union for a Free Trade Agreement (FTA), which would reduce the duties, the timeline for its conclusion remains uncertain. Encouragingly, there have been positive developments in inter-government discussions between India and the UK, which has enhanced the chances that a FTA with the UK might conclude in the near future. India recently concluded FTAs with the UAE and Australia, post which Indian players are seeing better traction in both of these geographies.

Technical Textile Industry

Technical textiles are products that have higher performance qualities as compared to traditional textiles, and both synthetic as well as natural fibres are used to manufacture the same. The synthetic fibres that are used for these applications are manufactured by a combination of some special chemical processes on various natural fibres to impart new properties. These fibres have enhanced qualities, such as higher strength than manmade fibres; hence, they are widely used not only for apparel use, but also in other different applications such as medical, automotive, and others. The global market for Technical Textiles is projected to reach US$208.5 Billion by 2024, registering a CAGR of 5% during the period, as per Global Industry Analysts Inc. The Asia-Pacific region is forecast to emerge as the fastest growing regional market with a CAGR of 7.7% over the same period.

The market growth in the APAC region can be attributed to it being a manufactured hub for many of the user industries as well as a rise in demand for these products in various application areas in the region. Countries including India, China and Brazil offer several opportunities for expansion of the technical textiles market.

In the Indian market, the healthcare and infrastructure sectors are two major demand drivers for technical textiles. The Indian Government recognises the potential of this industry with a desire to target a manifold increase in the export of technical textiles that could amount to US $10 billion over the next three years. To that effect, Government of India has introduced various schemes, subsidies, and other initiatives to promote manufacturing in this segment. Some of these include:

• Assignment of 207 Harmonised System Nomenclature (HSN) to promote Indias technical textile industry. As of November 2021, 377 technical textiles products were developed according to the Bureau of Indian Standards (BIS).

• Introduction of six additional courses for technical textiles in its skill development programme called Samarth.

• Uniform GST rate at 12% on man-made fabrics (MMF), MMF yarns, MMF fabrics and apparel, effective from January 1, 2022.

• Production-linked incentive (PLI) scheme for manmade fibre and technical textiles, which will help boost manufacturing, increase exports and attract investments into the sector.

Flooring Industry

The global floor covering market size was valued at USD 364.6 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 6.5% from 2022 to 2028, as per Grand View Research. Increased government spending in infrastructure development is one of the factors behind this growth, in addition to increased demand for insulation in housing and shifts in consumer preferences in favour of aesthetically improved designs, textures, and colours. Newer and innovation-led low-maintenance and easy-to-install flooring offerings are likely to further drive market growth.

Industrialisation and significant population growth are likely to continue to have a positive impact on the demand for this segment. Significant ongoing activity in the construction sector in countries like India, China, the UAE and broader APAC region will also contribute to overall market growth. Increased demand for environmentally friendly products along with the presence of a stringent regulatory framework on the production, usage, implementation, and recycling of flooring products in many regions is also expected to drive demand and create opportunities for players with the right set of offerings and capabilities.

The overall Flooring market can be broadly categorised into Resilient (ie, hard flooring) and Soft flooring that includes carpets and rugs. Resilient

flooring tends to be more durable, suitable for both commercial and residential spaces. Due to its high durability, lesser maintenance needs, modern look, and ease of installation, resilient flooring has become a preferred choice for many uses.

Demand in the carpets and rugs segments is healthy too, and the markets size is expected to reach an estimated $ 38.8 billion by 2026. Products in this category find use across the residential, nonresidential, and transportation segments with refurbishment activities being a key demand and growth driver. Consumer preferences are seen to be moving towards bold and attractive colours and nongeometric designer patterns for carpets and rugs.

New trends that have a direct impact on the dynamics of the carpets and rugs industry include increasing acceptance of carpet tiles, increasing demand for ecofriendly carpets, and increasing preference for modern carpets.

The United States and Europe represent the worlds largest markets for Flooring solutions, both hard as well as soft. Demand in India too has been witnessing an uptrend over the recent years, with rising disposable incomes and urbanisation as well as industrialisation being the key demand drivers. As in other industries, supply chain disruptions and input cost inflation have affected the Flooring industry during and post the pandemic in the near to medium term. New opportunities have, however, opened up for players from India owing to the "China+1" strategy that is being adopted by many western buyers.

Review of Macro-economic factors

Foreign Exchange

The Indian rupee has been relatively stable during the period under review, although it did soften to around C 76.5 per USD by late April 2022, tracking a similar move in regional currencies due to a stronger dollar, following raised expectations of higher interest rates in the US. A softening rupee tends to benefit exporters, as it drives up rupee-term realisations. Elevated energy costs and the geopolitical risks associated with the situation in Ukraine continue to weigh on the financial markets and risk appetites. Domestically, the RBI too made changes to its monetary policy meeting by restoring the corridor for its liquidity adjustment facility to the pre-pandemic level of 50 basis points and raising rates in May 2022, likely indicative of its willingness to withdraw some of its accommodative stance going ahead.

Cotton Production and Prices

The global 2021-22 cotton area and production are projected at 32.7 million hectares (80.80 million acres) and 121 million bales of 217.72 Kg each. Cotton production in most of the major producing countries is expected to increase, except in India and China, in 2021-22. India produced 33.5 million bales in 2021-22. The total cotton supply during the financial year 2021-22 was 42.5 million bales, which consisted of the imports of 1.5 million bales and Opening Stock of 7.5 million bales. Cotton acreage in India is anticipated to rise in the season during FY23.

India Cotton Supply - Demand



Details (in Lakh b/s) (in 000 Tons) (in Lakh b/s) (in 000 Tons)
Opening Stock 75 1275 125 2125
Crop 335.13 5697.21 353 6001
Imports 15 255 10 170
Total Supply 425.13 7227.21 488 8296
Mill Consumption 300 5100 292 4964
Consumption by SSI Units 25 425 25 425
Non-Mill Consumptions 15 255 18 306
Total Domestic Demand 340 5780 335 5695
Available Surplus 85.13 1447.21 153 2601
Exports 45 765 78 1326
Closing Stock 40.13 682.21 75.00 1275

Source: Wazir Advisors

Global cotton consumption increased by 18% year-on- year to reach 26.6 million tonnes in 2021 on account of higher demand from the US, which imports nearly all its cotton products (imports worth USD 49 billion in CY 2021 vs USD 37 billion in CY 2020). Higher demand, restricted use of Chinese cotton (around 20% of global share) and lower cotton output at 24.3 million tonnes (down 8% year-on-year) orchestrated a significant drop in global cotton inventory. The cotton inventory-to-consumption ratio is a key metric to track global cotton prices, and a decline in this ratio typically leads to an increase in prices. While a sharp rise in prices initially benefited Indian spinners who were sitting on low-cost inventory, it adversely affected users of cotton fibre and yarn such as manufacturers of fabrics, made-ups, and apparel. An uptrend in a key raw material like cotton ultimately tends to result in elevated prices of finished goods, which after a certain level might begin to hinder demand. Higher cotton sowing in the coming season due to better crop pricing is expected, which will gradually improve cotton supplies and result in a price decline from the unforeseen highs witnessed during the early part of the year 2022 when domestic rates of cotton crossed about C 1 lakh per candy

India Domestic Cotton Prices

Domestic Trade information

Table: State wise Wholesale Prices Monthly Analysis for Cotton February,2022(C/Quintal)

State Prices February, 2022 Prices January, 2022 Prices February, 2021 % Change (Over Previous Month) % Change (Over Previous Year)
Andhra Pradesh 9147.09 8701.41 5.12
Gujarat 9251.31 8901.65 5641.25 3.93 63.99
Haryana 8948.8 8614.73 3.88
Karnataka Madhya 9639.57 9305.19 5819.98 3.59 65.63
Pradesh 9583.96 9166.53 5787.16 4.55 65.61
Maharashtra 9653.88 9530.58 5791.6 1.29 66.69
Odisha 9120.66 7931.97 5708.36 14.99 59.78
Punjab 8496.79 8686.78 5833.96 -2.19 45.64
Rajasthan 9920.22 9048.69 5986.81 9.63 65.7
Tamil Nadu 9995.2 9104.04 4793.17 9.79 108.53
Telangana 9399.2 8899.12 5642.47 5.62 66.58
Average 9377.88 8686.1 56672

Company Review


Welspun India Limited (Welspun or WIL or the Company), part of the Welspun Group, is a global leader in Home Textiles and one of the largest home textiles manufacturers in the world. The Company offers a broad spectrum of home and advanced/ technical textiles products and flooring solutions.

With a distribution network in over 50 countries, the Company is the largest exporter of home textiles products from India. It is the trusted partner and preferred supplier to top global retail giants and hospitality players, and supplies from its world-class manufacturing facilities at Anjar and Vapi, both in the state of Gujarat in India. WIL is differentiated by its strategy based on Brands, Innovation, and Sustainability.

The Companys revenue is predominantly derived from exports to various countries worldwide, with a strong presence in key markets such as the US and the UK.

In the US, it has a dominant presence in the towel and bed linen market, and in the UK, it is present across every major store via its own brands and private label. The Company is continuously working on increasing its footprint in newer geographies, including Continental Europe, Japan, Australia, the Middle East, and the Indian domestic market in particular. Even as exports contribute a very large part of its overall business, WIL is keen to also expand its domestic market presence and has taken a series of actions in that direction, the positive results of which are reflected in its operating and financial performance.

WIL: Key Competitive Strengths

• Diversified brands (own and licensed) portfolio

• Vertically integrated presence and capabilities

• Global distribution network and deep relationships with marquee clients

• Exceptional track record of innovation

• Broadest product range in the industry

• Strong focus on sustainability

• Experienced Board and management team with proven track record

• Consistent robust financial performance

Key Business and Operational Highlights

WIL delivered a strong performance in FY22, attributable to its highly differentiated and unique value proposition for its customers, resulting from its high-quality products, investments in innovation and technology reflected in multiple patents and initiatives like blockchain-enabled traceability as well as its ability to partner with clients in demand planning, forecasting and logistical support.

During the financial year FY22 the Company recorded revenues of C 93,773 million, 26.6% over the preceding financial year. After crossing the US $1 billion mark in overall revenues in the preceding year FY21, the Company touched a fresh milestone during FY22with its Home Textiles business crossing the milestone of US $1 billion with revenues of C 87,911 million, growing by 23.3% year-on-year.

This growth-led performance was enabled by both the core business as well as the Emerging Businesses of Brands, Ecommerce, Flooring and Advanced Textiles that combined registered a growth of 44%, contributing 26% to the Companys overall revenues.

Innovation continued be a key growth and differentiation enabler, propelled by the Companys patented products and processes, accounting for 27% of Home Textiles revenues in FY22, growing by 6% year-on-year. By the end of FY22 Welspun India Ltd : had 35 patents filed globally, largest for any Home Textiles player.

The US geography, which is the largest market for the Company, witnessed the successful launch of three brands during the course of the year - Welhome, Martha Stewart Everyday, and Scott Living.

The Companys Domestic Retail business grew by 66% in FY22 on the back of significant expansion in its retail footprint that now covers 6,642 outlets across 482 towns, in line with its aim of "Har Ghar Welspun". This in turn has reinforced Welspun to be the Number 1 distributed Home Textiles brand in India, with two of its brands under the domestic business (Welspun and SPACES) individually becoming power brands.

Welspuns direct-to-consumer (D2C) initiatives globally have steadily been transforming it into : an FMCG of Home Textiles with the Companys E-Commerce and Branded business continuing its upward trajectory during the year under review,

growing by 40% and accounting for 16% of total revenues.

Licenced brands grew by 54% YoY, with strong contributions from brands such as Martha Stewart. Christy continued to be one of the Companys largest brands, growing 20% during the year.

The Companys emerging Flooring business continued to achieve newer milestones with its revenues more than doubling in FY22 to C 6,611 million, a growth of 107.4% over the preceding year. Continuing on its focus on innovation, in Flooring too Welspun now has 2 filed patents to its name. Newer geographies in Africa, Middle East and Far East have been added and the trend of repeat orders from existing large customers in this business has been very encouraging.

WILs Advanced Textiles business revenues in FY22 stood at C 2,671 million. The performance of this particular business reflects relatively lower demand for Spunlace products due to stock corrections after an unusually strong FY22, which saw a surge in demand for health textiles, as well as headwinds that the business faced due to higher logistics costs. This business has been witnessing a normalisation and revival in demand across multiple markets. The commencement of commercial operations in March 2022 of its facility in the state of Telangana, which has an installed capacity of 17,729 MTPA of Spunlace, augurs well for this segments prospects going forward.

Summary of operational performance

Home Textiles


Revenue HT - B2B HT - Branded HT - E-commerce Advanced Textiles Flooring - B2B Flooring - Branded
FY22 61,890 8,565 4,362 2,671 5,264 716
FY21 51,003 5,138 3,918 2,850 2,418 615
Growth % 21% 64%td> 12% -7% 118% 16%
Sales contribution FY22 74% 10% 5% 3% 6% 1%
Sales contribution FY21 77% 8% 6% 4% 4% 1%


HT: Home Textile

HT Branded: includes sales from licensed brands Revenue excludes Other Operating Income





Global Domestic
Innovation Others Domestic Online Offline Online Offline
FY22 20,466 45,057 4,301 4,182 5,655 179 3,626
FY21 19,287 33,372 3,612 3,741 3,500 176 2,253
Growth % 6% 35% 19% 12% 58% 20% 61%
Sales contribution FY22 25% 54% 5% 5% 7% 0% 4%
Sales contribution FY21 29% 51% 5% 6% 5% 0% 3%


*Global: Non-Domestic

#Branded: includes Innovation

Revenue excludes Other Operating Income


In a world that is grappling with environmental and social challenges and imperatives on an ongoing basis, it is incumbent upon everyone including businesses to act prudently and responsibly. While businesses across the globe are constantly innovating to upgrade their operations and make it more sustainable and environment-friendly, consumers too tend to flock to brands that are transparent and who take environmentally-conscious decisions in their production and delivery processes. At WIL, we are cognizant of this trend and work in a purposeful manner to make our contribution towards overcoming these challenges. Over the past few years we have made significant investments in the areas of sustainability including, amongst others, initiatives like Rain-Water Harvesting and Sewage Treatment to lower the freshwater footprint in our operations. Our social initiative "Spun", which is dedicated towards women empowerment, enables upcycling.

We have also partnered with farming communities across the country, to provide them with access to the best agronomic practices and technology, thereby enabling them to grow sustainable forms of Cotton (Better Cotton Initiative and Organic Cotton) in an initiative spread over 350 villages, impacting more than 15 thousand farmers.

WILs focus on all aspects of ESG is integral to its business strategy. The Companys ESG Committee is engaged in reviewing and overseeing all activities pertaining to ESG and provides appropriate directions and guidance to the management in this regard.

To achieve WILs mid and long-term ESG goals, it has set ambitious goals and implemented strategies to make progress on the same. The Company, already rated as "Low Risk" on ESG factors by one of the top ESG rating agencies, is conducting a gap assessment study to identify measures to move to the "Negligible Risk" rating. WILs sustainability journey is now a case study on the Ivey publishing website.

On the ESG front, Welspun has been the front runner in its industry, encompassing sustainability and ESG in every realm of its operations. The Company is clearly differentiated in the industry due to its sustainability efforts and initiatives that have already delivered significant outcomes and have set benchmarks for the industry as a whole. Some of the initiatives include:

• Multi-level traceability solution WelTrak, which allows the consumer to track a finished Bed/Bath product to its raw material source, using block chain.

• First Dow Jones Sustainability Index (DJSI) Assessment in FY22 with an ESG rating of 48, which is 62% higher than the average industry score.

• Setting up "ESG Compass", an integrated ESG digital platform with automated data dashboards covering over 90 indicators and extending to all sites, locations and subsidiaries in India.

Our noteworthy achievements and recognitions in the

ESG space include:

• National Award for water, announced by the Indian Governments Ministry of Jal Shakti. The recognition came on the back of the social and environmental impact made by WILs cutting edge sewage treatment plant in the drought prone Kutch district in Gujarat.

• Recognised by Frost & Sullivan and The Energy And Resource Institute (TERI), for its sustainability practices at the sustainability 4.0 awards.

• Launched the Well Krishi program, which aims to build a strong self-reliant and prosperous farming community, empowering over 15,000 farmers and 75,000 farm workers across more than 350 villages, to sustainably produce over 15,000 metric tons of cotton from 80,000 acres.

• Adopted circularity across its business, with focus on use of recycled content, both in textiles and packaging. The Company collaborates with the Sorting for Circularity India Project anchored by Fashion for Good, Amsterdam, which is a consortium project that aims to build a new textile waste value chain in India.

Manufacturing Capacity

Home Textiles

Particulars UOM Annual Capacity
Bath Linen MT 85,400
Bed Linen Mn mtrs 90
Rugs & Carpets Mn sq mtrs 12
Advance Textiles
Particulars UOM Annual Capacity
Spunlance* MT 27,729
Needle Punch MT 3,026
Wet Wipes Million packs 100

* Additional Capacity of 17,729 MT, commenced effective 12th March 2022


Particulars UOM Annual Capacity FY22
Expected Operational
Flooring Mn sq mtrs 27 18

Financial Performance FY22 (E in million)

Revenue EBITDA PBT PAT Cash Profit
93,773 14,246 8,728 6,012 10,703
Growth (YoY) 26.6% 0.3% 13.6% 11.4% 5.0%
Margin (%) 15.2% 9.3% 6.4%
Margin Expansion/Contraction (YoY) (397 Bps) (107 Bps) (87 Bps)
EPS/CEPS 6.06 10.83

Note: Prior period figures are restated wherever necessary.

Total income during FY22 grew by 26.6% to C 93,773 million from C 74,080 million in FY21. The Companys EBITDA margin was 15.2% for the year and in the core business of Home Textiles the EBITDA margin was 16.1%, reflecting multiple and significant headwinds with commodity prices touching historical highs and shipping as well as energy costs witnessing a manifold increase, in addition to supply chain and logistical challenges. These macroeconomic factors, including the ongoing Russia-Ukraine conflict, have led to substantial inflationary pressures that have sustained even as the new fiscal year began. The Company has been undertaking measures to drive cost optimisation and improved efficiency, rationalising its fixed cost across functions and business units while also monitoring its working capital to ensure healthy liquidity and gain savings in finance costs.

RoE for the Companys business stood at 15.8% in FY22 as compared to 16.3% in FY21 year and RoCE stood at 13.4% in FY22 (vis-a-vis 13.8% in FY21). Even after the investments made in its growth businesses and after concluding the buy back of shares done during the year, net debt further reduced to C 22,289 million as on 31st March 2022. Net debt excluding the newly initiated Flooring business stood at C 13,989 million at the end of FY22. Over the last 5 years the Companys Net Debt-to-Equity has improved to 0.56x as on 31st March 2022 from 1.27x as on 31st March 2017.

The expansion projects of Flooring, Advanced Textiles and Home Textiles businesses, which were in different stages of progress, reached near-completion in FY22, with some balance capex remaining that would get concluded in the next financial year. The Company expects to be able to sustain its multi-year trend of deleveraging and further strengthen its balance sheet as we enter the new financial year.

Key Financial Numbers

Particulars FY22 (D in million) % of Total Income FY21 (K in million) % of Total Income
Revenue from Operations (Net) 93,115 99.30% 73,402 99.09%
Other Income 658 0.70% 678 0.91%
Total Income 93,773 100% 74,080 100.00%
Cost of Material 50,941 54.32% 35,873 48.43%
Manufacturing Expenses 10,432 11.13% 8,706 11.75%
Employee Cost 8,667 9.24% 8,228 11.11%
Selling Administration and Other Expenses 9,488 10.12% 7,075 9.55%
EBITDA 14,246 15.19% 14,198 19.17%
Finance Costs 1,312 1.4% 1,975 2.67%
Depreciation and Amortisation Expense 4,205 4.48% 4,536 6.12%
Taxes 2,663 2.84% 2,179 2.94%
Profit Before Extraordinary Items 6,067 6.47% 5,507 7.43%
Exceptional Items - - - -
Minoritys Share of Profit/(Loss) in Certain Subsidiary Companies 55 0.06% 111 0.15%
Net Profit (Loss) 6,012 6.41% 5,397 7.29%
EPS (Basic and Diluted) 6.06 5.37

1. Revenue

a. Revenue from Operations

During FY22, Revenue from Operations was C 93,115 million, up 26.9% from C 73,402 million in FY21.

b. Other income

Income from other sources was C 658 million in FY22, vis-a-vis C 678 million in FY21.

2. Expenditure

a. Cost of Materials

Cost of material increased during the year under review to C 50,941 million from C 35,873 million in the preceding year, reflecting the impact of higher raw material prices.

b. Manufacturing Expenses

Manufacturing expense was C 10,432 million in FY22 compared to C 8,706 million in FY21. The manufacturing expense includes power, fuel, and water charges of C 2,942 million, dyes and chemicals of C 3,125 million and contract labour and job work charges of C 1,551 million. As a percent of total income, manufacturing expenses stood at 11.13% in FY22 compared to 11.75% in FY21.

c. Employee Cost

Employee cost stood at C 8,667 million in FY22 compared to C 8,228 million in FY21. As a percent of total income it was 9.24% in FY22 compared to 11.11% last year.

d. Selling, Administration and Other Expenses

Selling, administration and other expenses were reported at C 9,488 million in FY22 vis-a-vis C 7,075 million in FY21. The increase was primarily because of higher logistics expenses during the year.

e. Finance Costs

Financial expenses in FY22 were H 1,312 million.

The corresponding figure in FY21 was H 1,975 million.

f. Depreciation and Amortisation Expense

Depreciation was reported at C 4,205 million in FY22 vis-a-vis H 4,536 million in FY21.

3. Profitability


EBITDA during FY22 stood at C 14,246 million, implying an EBITDA margin of 15.2%.


Profit after Tax post minority interest stood at C 6,012 million in FY22 vis-a-vis C 5,397 million in FY21. Net profit margin stood at 6.41% compared to 7.29% in FY21, reflecting increased input costs during the course of the financial year.

4. Earnings Per Share (Basic)

Earnings per share for the year ending March 31, 2022 was up by 12.8% at C 6.06 per share from C 5.37 per share at the end of March 31, 2021.

5. Balance Sheet

Particulars As at March 31, 2022 As at March 31, 2021
1. Non-current Assets
Property, Plant and Equipment 36,960 35,118
Capital work-in-progress 1,617 1,709
Goodwill on Consolidation 1,832 1,830
Other Intangible assets 214 283
Right-of-use assets 1,047 910
Intangible assets under development 42 21
Financial Assets
- Investments 39 19
- Loans 19 4
- Other financial assets 1,922 768
Non-current tax assets (net) 403 397
Deferred Tax Assets (net) 1,251 1,120
Other non-current assets 523 627
Total Non-current Assets 45,870 42,806
2. Current Assets
Inventories 19,779 17,731
Financial Assets
- Investments 6,939 1,093
- Trade receivables 9,993 11,817
- Cash & cash equivalents 2,318 2,994
- Bank balances other than cash and cash equivalents above 337 997
- Loans 6 6
- Other financial assets 2,332 4,422
Current tax assets (net) 28 21
Other current assets 6,766 4,891
Total Current Assets 48,499 43,972
Total Assets 94,368 86,778
1. Equity
Equity Share capital 988 1,005
Other Equity
- Reserves and surplus 38,620 35,164
- Other reserves 108 278
Equity attributable to owners of Welspun India Limited 39,717 36,447
Non-controlling Interests 1,046 985
Total Equity 40,763 37,432
2. Liabilities
Non-current liabilities
Financials Liabilities
- Borrowings 10,536 9,705
- Lease liabilities 904 777
- Other financial liabilities 73 52
Non-current tax liabilities (net) 2,229 2,244
Provisions 29 27
Deferred tax liabilities (net) 2,980 2,494
Other non-current liabilities 1,442 982
Total Non-current liabilities 18,193 16,282
As at March 31, 2021
3. Current Liabilities
Financials Liabilities
- Borrowings 21,348 18,709
- Lease liabilities 251 212
- Trade payables
(a) Total outstanding dues of micro enterprises and small enterprises 580 525
(b) Total outstanding dues of creditors other than micro enterprises and small enterprises 8,725 10,391
- Other financial liabilities 841 589
Employee benefit obligations 1,544 1,346
Current Tax Liabilities (net) 670 51
Other Current Liabilities 1,453 1,241
Total current liabilities 35,413 33,064
Total liabilities 53,606 49,346
Total Equity and Liabilities 94,368 86,778

5. Networth

Net worth of the Company stands at C 39,717 million on March 31, 2022 against C 36,447 million at March 31, 2021.

Book value of equity shares stands at C 40.20 per equity share as at March 31, 2022 which was C 36.28 per equity share on March 31, 2021.

The details of movement under various heads for Net Worth are as follows:

a. Share Capital

The issued, subscribed, and paid-up share capital as of March 31, 2022 stands at C 988.06 million.

b. Reserves and Surplus

• Securities Premium Account: The Securities Premium account balance stands at B 1,238 million at the end of FY22, which was B 3,238 million at the end of FY21. This reflects the share buy back concluded during the year.

• Capital Redemption Reserve: The balance as of March 31, 2022 amounted to C 1,624 million, which was C 1,608 million at the end of FY21.

• Capital Reserve: The balance as of March 31, 2022 amounted to C 1,475 million, which was almost the same as at the end of FY21.

• Foreign exchange translation reserve as of March 31, 2022 stands at C (14) million vis-a-vis C (60) million in the previous year

• Profit and Loss Account: The balance in the Profit and Loss Account as on March 31, 2022 was C 33,326 million vis-a-vis C 27,911 million as on March 31, 2021.

6. Loan Funds

• Gross debt as on March 31, 2022 stands at C 31,884 million compared to C 28,414 million at the end of FY21. The long-term debt stands at C 12,142 million vis-a-vis C 10,962 million at the end-of FY21.

• Cash and cash equivalents of the Company in FY22 stands at C 9,595 million up from C 5,084 million at the end of the preceding financial year.

• Net debt as on March 31, 2022 stands at C 22,289 million after reducing the cash and bank balance and liquid investment. At the end of FY21, the net debt was C 23,327 million.

• Net debt at the end of FY22, excluding flooring debt, was C 13,989 million.

• Net debt to Equity stands at 0.56 at the end of FY22 (vis-a-vis 0.64x at the end of FY21) while Net debt/EBlTDA stands at 1.56 at the end of FY22 (compared to 1.64x at the end of FY21).

7. Fixed Assets

Net block (including Capital Work in Progress) stood at C 38,578 million by the end FY22 vis-a-vis C 36,827 million at the end of FY21.

8. Inventory

Inventory as on March 31, 2022 stood at C 19,779 million vis-a-vis C 17,731 million in FY21. The inventory days were 78 days in FY22 compared to 88 days in FY21. The Inventory turnover ratio stands at 4.7x in FY22 against 4.2x at the end of FY21.

9. Debtors

Sundry debtors on March 31, 2022 were at C 9,993 million, a reduction from C 11,817 million at the end of FY21. Receivable days/debtor days is 40 days in FY22 compared to 59 days in FY21. Debtors turnover ratio stands at 9.22 in FY22 visa-vis 6.3 times at the end of FY21.

10. Current Liabilities

Trade payables stood at C 9,305 million as of March 31, 2022 vis-a-vis C 10,915 million in FY21.

11. Buy Back & Dividend

The Company has a stated policy, according to which the Board will endeavour to achieve distribution of 25% of PAT for a financial year, on consolidated basis, with equity shareholders. The Company had made an offer for buy-back of fully

paid-up equity shares of C 1 each of the Company, not exceeding 1,66,66,666 equity shares (representing approximately 1.66% of the total number of equity shares in the issued, subscribed and paid up equity capital) at a price of C 120 per equity share, not exceeding C 2,000 million on a proportionate basis by way of tender offer in accordance with the provisions of Companies Act, 2013 and SEBI (Buy-Back of Securities) Regulations, 2018. The tendering period for the buyback offer opened on June 22, 2021 and closed on July 05, 2021. Total 1,66,66,666 equity shares were bought back at a price of C 120 per equity share and the total amount utilised in buy-back was C 2,000 million. The settlement of bids by the Clearing Corporation on the stock exchange was completed on July 14, 2021.

Key Financial Indicators

Particulars As at March 31, 2022 As at March 31, 2021
Total Income (E in million) 93,773 74,080
EBITDA (C in million) 14,246 14,198
EBIT (C in million) 10,041 9,662
Net Profit after Tax (C in million) 6,012 5,397
Net Worth (C in million) 39,717 36,447
Net Debt (C in million) 22,288 23,327
Net Debt/Equity (in times) 0.56 0.64
Net Debt/EBITDA (in times) 1.56 1.64
Net Sales/Net Worth (in times) 2.36 2.03
Interest Coverage Ratio (in times) 7.65 4.89
Current Ratio (in times) 1.37 1.33
Pre-tax ROCE (in %) 13.4 13.8
ROE (in %) 15.8 16.3
Inventory Days (in days) 78 88
Receivable Days (in days) 39 59
Payable Days (in days) 36 54
Net Operating Cycle i.e. Inventory Days + Receivable Days - Payable Days (in days) 80 93
Book value per share 40.20 36.28

Note: The days outstanding are calculated on the basis of the closing numbers

Changes in Key Financial Ratios

Ratios As at March 31, 2022 As at March 31, 2021 Remarks
Debtors Turnover 9.2 6.3 Led by more efficient collections of accounts receivable
Inventory Turnover 4.7 4.2 Reflects higher cost of goods due to increase in raw material prices
Interest Coverage Ratio 7.7 4.9 Interest coverage ratio has improved, reflecting healthy cashflows and reduced net debt
Current Ratio 1.4 1.3 No significant change
Debt Equity Ratio 0.56 0.64 Reflects reduced net debt
Operating Profit Margin (%) 15.2 19.2 Reflects impact of higher input costs
Net Profit Margin (%) 6.6 7.3 Reflects impact of higher input costs in operating and net margins
Return on Average Equity (ROE in %) 15.8 16.3 No significant change


The Companys growth during the year under review has been stellar in the face of unprecedented challenges, with a strong performance demonstrated by its core as well as its emerging businesses.

High input costs, rising inflation, and the resulting weakening of business sentiment are issues that are likely to take some time to ease but players like Welspun that enjoy scale, high differentiation, operating efficiencies, and strategic relationships with clients tend to be better positioned to face medium term adversities and emerge stronger. The Company has been taking the steps necessary to ensure that it continues its dialogues and long term partnerships with its customers, while keeping a keen eye on operating costs and further innovating and value engineering its products. The Company remains focused on executing its long-term growth strategy centred around its brands, emerging businesses, and B2C and D2C channels including retail and e-commerce.

Risk Management

Risks are inevitable in todays world and WIL strongly believes that its success depends upon identification of potential risks in advance and the creation of appropriate mitigation strategies to bypass or minimise impact, to the extent possible. The Company constantly scans its external environment to identify emerging threats while also evaluating its

impact on its business goals. WILs Risk Management Committee reviews the managements enterprisewide risk management efforts and provides valuable recommendations and guidance towards mitigating the same.

The Companys risk management policy is well- defined and encompasses a robust risk management framework. The Risk Management Committee of the Board oversees and reviews this framework, while also assessing the risks, its management strategy and mitigation procedures. This Committee is tasked with reporting its findings and recommendations to the Board.

The Company has localised its effort to minimise risks by creating risk management committees at each location (plants and head office), thereby promoting a risk-aware culture across the organisation. These committees assess risks and monitor mitigation measures at their respective locations. The Company has created risk registers for each location, which includes every minute function. Risk prioritisation and monitoring is therefore performed, at a functional level, at a plant level as well as at the Company level. Plant heads and functional heads are responsible for managing the risks. Apart from the scheduled and structured risk management meetings, risk management is also included in the business performance review, wherein inherent risks are discussed during the business review meetings.

Some of the key strategic and business risks the Company is actively managing are summarised as under:

Risks Mitigation strategies
Increased demand for sustainably manufactured products, resulting from changing consumer mindsets. The Company consistently works towards innovation in manufacturing sustainable products. It spends around 0.5%- 0.75% of its revenue on product innovation.
Concentration risk, with heavy dependence on few geographies and customers The Company is developing a detailed supply chain mechanism to increase its share of e-commerce. Currently, it is working on finalising logistics and warehouse management for the same.
Inability to expand operations / fear of losing opportunity towards additional demand on account of space constraint at existing plant locations. Concentration risk, since a majority of its plants are located in the state of Gujarat. The Company plans to cater to incremental demand through outsourcing. To that effect, it has garnered many strong relationships with vendors that align with our quality and excellence. Going forward, the Companys own capacities will only cater to US and UK customers.
The management is looking to explore design changes at the existing plants to explore if additional production lines can be set up. Moreover, the Company is now manufacturing Flooring products and has also commercially started expanded operations for Spunlace in the state of Telangana
Impact on profitability and cash flows due to withdrawal of rebate in taxes This risk will impact the entire Textile industry, if it fructifies. The Company would continue to engage through industry forums like ASSOCHAM to make formal presentations to the Government as necessary.
Cyber vulnerability leading to breaches in systems and leaking of the Companys A maturity map /scorecard for different activities has been created across different risks (operational. IT infrastructure, application, end point) and around 235+ control points have been identified.
Inability to attract and retain talent The Company works towards upskilling to achieve higher productivity, and takes appropriate measures to retain high skilled workers.
Operating risks, such as • A substitute of 60 PVA has been identified (Mint yarn), and materials can be sourced from Japan easily, although it marginally increases the cost of production. WIL has initiated procurement of the same.
• Volatility in cotton prices may impact profitability adversely • The Company is developing relationships in other countries, especially Tanzania, Turkey and Myanmar, for organic cotton.
• Non-availability of Key Raw Materials resulting in supply chain issues • Within India, it plans to tap the organic farming practices in Maharashtra and Gujarat
• Non fulfillment of customer orders due to limited availability of specialised/organic cotton • A detailed business plan is being presented to the Management for replacement of Old Looms
• Use of obsolete technology impacting economic efficiencies. • The global sourcing team at WIL is working to identify vendors across multiple geographies to undertake localised production
• Impact on business continuity due to the COVID-19 pandemic and other such world affairs
Inability to attract and retain talent The Company constantly innovates to stay ahead of its competition. To that effect, it has diversified its portfolio to include new products like Welspun Flooring. It also keeps undertaking measures to continually stay ahead of the curve and differentiate itself through its superior scale and quality as well as deep strategic relationships with clients. The growing contribution from Brands too add to the competitive edge that the Company already enjoys.

Human Resources

With over 24,000 employees on its payroll, the WIL workforce is among the Companys most critical assets. WIL constantly invests in the up-skilling of its workforce and creates a nurturing and supportive environment for them to enable them to learn, grow and thrive. The Company provides various platforms such as events, programmes and training sessions, to induce team spirit while also helping them enhance their skills, thus ensuring a positive work environment and culture that inspires them to perform with precision and productivity.

Internal Control Systems and their Adequacies

The internal control system includes the policies, processes, tasks, behaviours and other aspects of WIL, which when combined, facilitate effective and efficient operation, quality of internal and external reporting, compliance with applicable laws and regulations. WILs objectives, its internal organisation and the environment in which it operates are constantly evolving and as a result, the risks it faces are continuously changing as well. To make its internal controls effective and sound, WIL thoroughly and regularly evaluates the nature and extent of such risks to which the Company is exposed. The operation and monitoring of the system of internal control has been undertaken by individuals who collectively possess the necessary skills, technical knowledge, objectivity, and understanding of the Company, industries and markets in which it operates. The qualified, experienced and independent Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal controls systems and suggests improvements whenever required. WIL has a strong and effective Management Information System, which is an integral part of its control mechanism.