Welspun India Ltd Management Discussions.

We maintain our focus on the domestic market and building a strong B2C presence, while continuing to grow our export business.

Our new initiatives such as flooring solutions and advanced textiles are contributing towards sustaining the growth momentum.

Branding, innovation and sustainability continue to be the cornerstones of our differentiation strategy.

Rajesh R Mandawewala Managing Director

The Management Discussion and Analysis (MDA) should be read in conjunction with the Audited Consolidated Financial Statements of Welspun India Limited (‘Welspun or ‘WIL or the ‘Company), and the notes thereto for the year ended March 31, 2020. This MDA covers Welspuns financial position and operational performance for the year ended March 31, 2020. Currency for this MDA is Indian Rupees unless otherwise indicated. The numbers for the year ending March 31, 2020 as well as for the previous year are on a consolidated basis and regrouped and reclassi ed wherever necessary.


This report contains forward-looking statements, which may be identified by their use of words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘projects, ‘estimates or other synonyms. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.


Welspun India Limited (‘Welspun or ‘WIL or the ‘Company), part of the US$ 2.7 billion Welspun Group, is one of the largest home textile manufacturers in the world. The Company offers a wide spectrum of Home & Technical textile products and Flooring solutions. It has been ranked the No. 1 home textile supplier to the US for ve times in the preceding six years. The Company has established itself as a thought leader within the home textile industry over the years and continue to focus on the enablers viz. Innovation, Branding and Sustainability to consolidate our leadership position.

We are taking rapid strides in our B2C business through our own brands, licensed brands as well as ingredient brands.

We have launched value brand “Welspun” in the domestic market to complement our premium brand “Spaces”.

Our domestic revenues will also be boosted by our flooring business under brand “Welspun”.

Dipali Goenka CEO & Jt. MD

About 95% of Welspun India Limited s revenue is derived from exports to various countries across the globe. The Company has a strong presence in key markets, such as USA and UK. Welspun India Limited has a dominant presence in the towel and bed linen market in US; and is present across every major store in UK via own brand and private label. The Company is continuously working on increasing its footprint in newer geographies including Continental Europe, Japan, Australia, the Middle East and particularly domestic market.

Around 20% of the Companys revenue is contributed by its own brands such as Christy, Welspun and Spaces as well as ingredient brands like Hygro, Wel-Trak and licensed brands like Martha, Wimbledon, Disney, Minions, Royal Ascot, Manchester City among others.

Welspun India Limited is not only a manufacturer but also a retailer and an FMCG player where it follows the ancillary model with capacities in Anjar and Vapi for the trims, packaging and yarn supplies.

With a distribution network in more than 50 countries, the Company is the largest exporter of home textile products from India. The Company is the trusted partner and preferred supplier to top Global Retail giants & Hospitality players and supplies from its world - class manufacturing facilities at Anjar and Vapi, both in Gujarat, India.


Global growth in CY2019 recorded its weakest pace since the global financial crisis a decade ago, reflecting common in uences across countries and country-specific factors. Worsening macroeconomic stress related to tighter financial conditions, geopolitical tensions, and social unrest rounded out the di cult picture. Increasing trade barriers as well as trade uncertainty stemming from rising trade tensions, especially between US and China, also resulted in declining business confidence and further limited trade. Amidst a weak environment for global manufacturing & trade and challenges in the domestic financial sector, the Indian economy slowed down with GDP growth moderating to 5.0 percent in FY2020 as compared to 6.8 percent in FY2019.

Among the developed economies, growth momentum weakened considerably since mid-2018. For the United States of America, trade related policy uncertainty weighed on business confidence and investment, but employment and consumption continued to be robust, supported by cuts in the Federal Funds rate. In Europe, the economy grew at a modest rate, as the manufacturing sector was negatively affected by international trade tensions and the impact of Brexit remained uncertain.

Due to the impact of COVID-19, the outlook for CY2020 looks bleak for the global economy. According to IMF, the global economy is expected to plunge into the worst recession in 2020, far worse than the Global Financial Crisis. The cumulative loss to global GDP over 2020 and 2021 is estimated at around 9 trillion US dollars greater than the economies of Japan and Germany, combined. Within this downturn, the projections are replete with even sharper declines in output in various countries. India is among the handful of countries that is projected to cling on tenuously to positive growth.

Emerging Asia is projected to be the only region with a positive growth rate in 2020 (+1.0 percent), albeit more than 5 percentage points below its average in the previous decade. In China, indicators such as industrial production, retail sales, and fixed asset investment suggest that the contraction in economic activity. Several economies in the region are forecast to grow at modest rates, including India (+1.9 percent).


USA Economic Review:

As the U.S. economy continues mid-way through its historic 11th year of uninterrupted growth, it remains in a good place and at a sustainable pace. During CY2019, retail sales increased 3.7 percent to $3.79 trillion. The CY2019 growth rate compared with 4.2 percent in CY2018. Online sales during CY2019 increased 12.9 percent to $777.3 billion.

The resilient and con dent consumer has provided staying power for U.S. economic growth, yet the business sector continues to weigh significant uncertainties. Corporate CEOs remain cautious given uncertainty over trade policy and the associated slowdown in global growth and U.S. manufacturing. Small business confidence has bounced around recently but remains elevated.

The coronavirus situation is very uid along with being very complex. It has already taken a toll on human life, but it is still too soon to speculate on the full scope and persistence of the contagion. However, the longer it persists, the more likely it will impact retailers in their merchandise sourcing and delivery, and the key question is the potential effect on the important back-to-school and holiday seasons. There will be supply chain disruptions, setbacks for travel, tourism and transportation, and commodity demand and price effects.


Real investment continued growing despite the moderation. Investment growth remained robust across all institutional sectors, as households, corporations and governments increased real investment expenditure. Uncertainty together with the deteriorating economic, political and regulatory environment in the European Union affected the growth. Low interest rates and a slowing economy provide the right backdrop for a more determined shift by governments from current to capital expenditures.

The strength of the economic expansion relies on domestic demand. Initially, the European economic recovery was largely due to strong net exports. As it gained momentum, employment and household disposable income rose and fueled household consumption. The economic expansion has seen solid employment gains and gradually tightening labour markets. The last six years of economic expansion have brought rates of unemployment down to their lowest levels since 1995 for most EU members (except for Italy, Spain and Greece), with employment rates well above pre-crisis levels in most EU economies.


Amidst a weak environment for global manufacturing, trade and demand, the Indian economy slowed down with GDP growth moderating to 4.2 levels.

The deceleration in GDP growth can be understood within the framework of a slowing cycle of growth with the financial sector acting as a drag on the real sector. To boost demand, 2019-20 has witnessed significant easing of monetary policy with the repo rate having been cut by RBI by 110 basis points. Having duly recognized the financial stresses built up in the economy, the government has taken significant steps this year towards speeding up the insolvency resolution process under Insolvency and Bankruptcy Code (IBC) and easing of credit, particularly for the stressed real estate and Non-Banking Financial Companies (NBFCs) sectors.

For 2021, however, the IMF projects sizable V-shaped recoveries: close to 9 percentage points for global GDP. India is expected to post a sharp turnaround and resume its pre-COVID pre-slowdown trajectory by growing at 7.4 per cent in 2021-22.


During FY20, Indias currency saw depreciation vis-a-vis the US dollar by falling nearly 10% or more than 600 paise loss during the 2019-20 fiscal, mostly due to weakened sentiment in the wake of Covid-19 outbreak. Of this, more than 400 paise or 6% per cent loss come in the last quarter of the financial year for the rupee, as coronavirus outbreak rattled the financial markets globally.

Year gone was highly volatile as we had seen multiple issues weighed on Asian currencies and rupee. We had seen US China trade war, foreign fund out flows, weaker domestic economic data and Coronavirus outbreak altogether weighed on rupee.

The rupee in FY20 opened at 69.12 vis-a-vis the US dollar in April 2019. From that level till July 2019 the rupee remained range bound and then in August 2019 the rupee crossed 72+ level. It further depreciated in March 2020 to breach 76 levels and finally closed at 75.4 at FY20-end.

Below chart shows the fluctuation of USD INR during Fy20.

Along with INR depreciation, FY2020 also saw depreciation of Chinese Yuan (CNY) and Pakistani Rupee (PKR). While CNY followed the similar trend that of INR, PKR witnessed major depreciation of more than 20% during the year. The PKR depreciation has helped Pakistan exporters in growing their business and becoming more competitive in the international market.


As per latest data, Global textile and apparel trade stood at US$ 823 billion which has grown at a CAGR of 4% since 2005. Apparel was the most traded T&A category across the globe with a share of 57% of the total T&A trade. Fabric was second to apparel and accounted for 19% of the total T&A trade.

The global trade of T&A is expected to grow from the current US$ 823 billion to US$ 1,000 billion in 2025, while growing at a promising rate of over 3% when compounded annually.

Global Apparel Market Size (US$ billion)

China has continued to be the largest T&A exporter. However, its share in global T&A trade has fallen from 36% in 2017 to 35% in 2018. The major reason for the decline is the increasing attraction of Chinas domestic textile and apparel market. With China vacating space in the global market, it is a great opportunity for countries like India, Vietnam and Bangladesh to grow in segments previously dominated by it and cash in on the vacated share.

India had maintained the position of the second largest supplier of T&A globally in the past decade. However, Germany with exports worth US$ 39.7 billion has resulted in India becoming the third largest supplier with exports worth US$ 37 billion in 2018.


India has traditionally been a major producer of textiles. The textiles and apparel industry contributes 2.3 per cent to Indias GDP and accounts for 13 per cent of industrial production, and 12 per cent of the countrys export earnings. It is the second-largest employer in the country providing employment to 45 million people at present, and this number is expected to rise to 55 million people by the end of 2020. Besides Population boom in the 20th century which led to an increased demand of textile and apparel in India, a rapid growth can also be seen in the disposable income of the middle and lower middle-class sections of the society which is expected to grow even further in the foreseeable future. In value terms, Indias domestic textile and apparel market is worth US$ 106 billion in 2019-20 and is expected to grow at a CAGR of 12% to reach US$ 220 billion by 2025-26. Apparel demand at US$ 78 billion, dominated the domestic market with a share close to 74% of the total textile and apparel market in India.

Textile and apparel exports of India stood at US$ 37 billion in the financial year 2018-19. However, analyzing the initial trade trend of FY 2020, it seems that the exports in FY 2020 might reduce to US$ 36 billion. Being a promising sourcing destination for global buyers, Indias T&A exports are expected to still reach US$ 70 billion by 2025-26, growing at a CAGR of 12%. The exports have grown at a 5% CAGR since the year 2005-06.

In a box: Indias T&A exports reached US$ 37.0 billion in 2018-19. Indias exports of T&A are expected to grow to US$ 70 billion by 2025-26.


Home textiles have been a major part of Global textile trade and it comes as no surprise. The ever-improving economic status of people supported by various modern financial innovations has enabled families to invest higher amounts into the home textiles segment.

The per capita expenditure follows a downturn trend as we move from west to east on the globe. This naturally creates a higher demand for textiles in the developed western countries. The disparity in the habitation of the home textiles manufacturers has also created a modern silk route between the eastern part of the world and the western.

The Top ten traded commodities accounted for almost 64% of the total Home textiles global trade. Cotton terry towels were single largest commodity with a massive market share of 14%. Moreover, out of the top 10 commodities, 4 commodities belong to the Carpets segment.

Global home textile industry is expected to increase to US$ 60 billion by 2025 from US$ 52 billion. In India, the home textile industry is expected to almost double from current levels of US$ 8 bn, by 2025-26.


With the adoption of modern technologies and better capacity building, India in recent years has emerged as a cost competitive base for manufacturing. Although the lending rates in India may be on a higher side, they are best in the region when compared to Bangladesh. Moreover, the water cost in India is among the lowest in the world and more than 200% cheaper than China.

India has strengthened its position as an alternative to China resulting from a favorable ease of doing business ranking, better compliance and political stability. The labor cost in India are highly competitive in the region and significantly lower than China.

Table 3 : Factor Cost Comparison of India with Competing Countries

Parameters Unit China India Bangladesh Vietnam Ethiopia
Labour Wages* US$ / month 550 - 600 160 - 180 110 - 120 190 - 200 80 - 90
Power Cost US$ / Kwh 0.15 - 0.16 0.10 - 0.12 0.09 - 0.12 0.08 - 0.10 0.03 - 0.04
Water Cost** Usc / m3 55 - 60 16 - 20 20 - 22 50 - 80 30 - 40
Lending Rate % 6% - 7% 11% - 12% 12% - 14% 7% - 8% 8.5% - 9%
EODB Ranking*** Rank 31 (91) 63 (132) 168 (129) 70 (99) 159 (127)

Indias advantage of being one of the largest producers of cotton is expected to continue as Indias cotton yield at present is 500 KG/HA which is much lower than the overall global average of around 600 KG/HA. With the average productivity of 2028 kg/ha, Australia is on the top. This indicates a huge future potential to grow in terms of cotton yield and production.

India is the worlds largest producer of organic cotton producing over 50% of the worlds total organic production.

World Cotton Balance Sheet 2019-20 (in Mn Metric Tonnes)

Country Opening Stock Output Import Consumption Exports Ending Stock
World 17.5 26.7 22.9 21.2
US 1.1 4.3 0.6 3.3 1.5
India 2.0 6.6 0.4 4.5 0.7 3.9
China 7.8 5.9 1.6 7.4 - 7.9
Pakistan 0.5 1.3 0.7 2.0 - 0.6

Source: USDA Cotton Incorporated

Cotton Prices and Outlook

Cotton Association of India (CAI) in its April release reduced the cotton crop estimate for 2019-20 to 330 lakh bales against 354 lakh bales estimated by it earlier. The cotton crop nalised by the CAI for the last year i.e. for the crop year 2018-19 was 312.00 lakh bales. The Crop Committee of the Association has estimated total cotton supply till end of the cotton season i.e. upto September 30, 2020 at 377.00 lakh bales.

Demand for cotton has taken a hit locally even as exports have come to a standstill due to slowing business activity across the globe. The global consumption for cotton for this year has been revised sharply lower to 22.5 million tonne by research firm Cotton Outlook, on expectations of weak demand from China, India, Vietnam, US and Indonesia.

Indias presence in key Global Home Textile Industry

India commands a significant share in the global cotton home textile market, thanks to its competitive edge in the form of abundant cotton availability and competitive costs.

According to the O ce of Textiles and Apparels (OTEXA) US, in CY2019, India supplied about 39% of the imports of cotton towels to the US, which has grown significantly from the levels of 30% in CY2009. Even in the cotton sheets segment, the Country supplied about 50% (CY2019) of the total import to the US, increasing from 27% (Cy2009).

Below graphs show the share of key countries in the US imports in cotton towels and sheets.

Similar to the US, Europe is an equally large market, but Indian players have low penetration due to duty disadvantage compared to countries like Pakistan, Turkey and Bangladesh which have preferential tari rates granted by the European Union (EU). Indian exporters pay 9-10% duty on the home textile products exported to the EU, whereas some of the key competing countries have zero duty access to the market. However, this also poses a significant opportunity for Indian players. Any significant reduction in duties on Indian exports can open up a huge market for Indian players. While India is in discussion with the European Union for a Free Trade Agreement (FTA) which would reduce the duties, the timeline for conclusion of the agreement remains uncertain. Below chart shows the share of various supplier countries in Europes terry towel and bed linen imports.


E-commerce and Omni-channel

In 2010, eCommerce accounted for 7.2% of the total retail sales in the U.S. (Up, by the way, from one% in 2000). By the end of 2018, it had nearly doubled to 14.3% of total retail sales. eCommerce is on pace to account for almost 16% of total U.S. retail sales in 2019 which is more than double what it was at the beginning of the decade.

eCommerces year-over-year growth rate in the U.S. never dipped below 12% through the course of the decade. The overall retail spaces year-over-year growth rate was never above 5% meaning eCommerces growth significantly outpaced retail growth as a whole.

The total eCommerce sales in the U.S. were $165.4 billion in 2010. As the retail market steadily grew and eCommerces chunk of it grew at a far more significant pace total eCommerce sales in the U.S. rose to $517.4 billion by the end of 2018. Thats 313% growth in revenue over the course of the decade.

Worldwide, eCommerce sales were $572 billion in 2010; they will hit $3.46 trillion in 2019, with China as the largest market. Thats 504% growth in the decade.

Shopping holidays also became eCommerce tentpoles. On Black Friday 2010, U.S. shoppers spent $648 million online. On Black Friday 2019, U.S. shoppers spent $7.4 billion online. Thats an increase of 1,042%. On Cyber Monday 2010, U.S. shoppers spent $1.028 billion the first billion dollar day in online shopping history. On Cyber Monday 2019, U.S. shoppers spent $9.4 billion, an 814% jump.

Singles Day in China had even more monumental growth over the decade. November 11, 2010 was the second Singles Day shopping holiday ever and saw $135 million in sales; on November 11, 2019, it did $38.3 billion. Thats a greater than 28,000% increase.

Circular Economy & Recycling

Globally, the USD 1.3 trillion clothing industry employs more than 300 million people along the value chain; the production of cotton alone accounts for almost 7% of all employment in some low-income countries. Clothing represents more than 60% of the total textiles used and is expected to remain the largest application. In the last 15 years, clothing production has approximately doubled driven by a growing middle-class population across the globe and increased per capita sales in mature economies. The latter rise is mainly due to the ‘fast fashion phenomenon, with quicker turnaround of new styles, increased number of collections offered per year, and often lower prices.

In recent years, the industry and its customers have become increasingly aware of the negative environmental and societal impacts of the current system. Brands and retailers have started to address specific environmental or societal challenges within their supply chains, both individually and through industry-wide organisations and initiatives.

Source: Ellen MacArthur Foundation, A new textiles economy: Redesigning fashions future, (2017, http://www.ellenmacarthurfoundation .org/publications)


Technical textile is a sub-set of the much larger textile sector which is gaining prominence only recently with evolving technology providing the means to enhance the functionality of textile products. With improved functionalities, these products have found applications across end user industries such as defence, railways, automobiles, healthcare, etc. Technical textile products are increasingly being used across the globe owing to these advantages. Adoption of technical textile products has been higher for economically developed countries like USA, EU, Japan, South Korea, etc. while usage of these products in industrialised countries such as China and India is consistently increasing.

Ministry of Textiles, Government of India, has been actively working towards development of technical textiles in India. The Government has launched several programmes for supporting the sector with creation of manufacturing, testing and research infrastructure, besides providing capital and interest subsidies for setting up technical textile plants.

Global technical textiles market (USD Bn)

Technical textile global market is anticipated to grow from USD 177 billion in 2018 to reach USD 220 billion by 2022 with a CAGR of 5.9 per cent.

Some of the factors influencing the growth of the market are:

• Rising demand from new application areas

• Varying consumer preferences

• Useful physical properties of technical textiles

• Innovation and R&D

• Government regulations

• Climate change and global warming

Technical textile industry in India is import dependent. Many products like speciality

fibres/yarns, medical implants, sanitary products, protective textiles, webbings for seat belts, etc. are mostly imported. However, technical textiles sector has registered impressive growth in the recent years.


The global flooring market size is estimated at $ 369 billion and is expected to expand at a CAGR of 5.9% from 2020 to 2027. The rising need for aesthetic interior materials in building structures is anticipated to fuel the product demand. The growth of construction sector, especially in the emerging economies is expected to further support the market growth.

Commercial application dominated the market in 2019 and is anticipated to continue leading over the forecast period. Rise in construction projects for office spaces, hospitals, healthcare facilities, educational institutes, and others across the globe is likely to support the demand in the forthcoming years. Rising demand for highly durable and cost-efficient product for use in high-tra c commercial and industrial sectors is projected to drive the growth. The development of new hassle-free installation techniques and related products is considerably driving the market for commercial flooring.

US Flooring Industry

In 2019 various issues up and down the supply and value chains restrained a market rife with innovation and design. According to Market Insights, for the year, US Flooring market consumption of flooring at mill price fell 4.4% to $22.5 billion.

On the supply side tariffsimposed on flooring made in China in September 2018 sent ripples through the market, generating volatility both globally and domestically. Flooring imports from China surged that fall as US flooring business rushed to buy inventory. And there were other repercussion in the market as US buyers chose between absorbing tari or to pass them on to the end customers. Others hunted for new manufacturing partnerships outside china looking for more stable pricing conditions. In late 2019, exemptions were made for click system LVT because it was determined that was nowhere near enough capacity outside China to serve US demand.

At the manufacturing level the surge in rigid LVT has created a dynamic innovative market. Several manufacturers have built facilities in the US. Among consumers a major factor last year was their unquenchable thirst for what everyone from vendors to retailers is increasingly simply calling waterproof flooring the catch-all for rigid LVT in every form.

The biggest flooring category in the US market is carpet, and it was down 5% last year and lost a little more market share. On the commercial side broadloom has shrunk to a minor position compared to carpet tile. On the residential side theres a very little carpet tile, and broadloom is losing share to hard surface most recently to rigid LVT.

Hardwood is another category under pressure down over 13% last year with SPC in the builder channel speeding up its share loss. And with the trend unlikely to abate anytime soon, the one silver lining may be the development of wood-topped rigid core products, which can be as waterproof as any rigid LVT.

2018 2019
Product Category Market Size $ Mn Market Share Market Size $ Mn Market Share
Carpet 8,293 35.2% 7,857 34.9%
Resilient 4,753 20.2% 4,921 21.9%
Hardwood 2,933 12.5% 2,536 11.3%
Ceramic Floor Tile 2,970 12.6% 2,814 12.5%
Area Rugs 2,787 11.8% 2,704 12.0%
Laminate 1,124 4.8% 971 4.3%
Rubber 670 2.8% 683 3.0%
Total Market Size 23,530 22,486


Last year domestic carpet market fell by 5.3% to 7.9 billion, according to Market Insights, and it share of the flooring market fell slightly to 34.9%. While domestic production in the US market was further reduced by a drop in imports. While US carpet is sufficient to meet domestic consumption, some of the carpet is exported mostly to Canada, while specialty carpets are imported from Asian producers and some higher end goods from Europe.

Commercial market outperformed residential carpet last year, in part because of continued market share shift from broadloom to caret tile. Multifamily and builder business outpaced residential remodeling. Since the higher price points are on the remodeling side, this sort of imbalance generally pushes dollars down more than volume, but that wasnt the case last year.

The Multifamily market has been strong since the Great Recession. New construction has slowed but the market grew as much in the intervening years that the sheer volume of apartment turns when tenants leave, carpet is often replaced - has kept residential dealers with plenty of work.

Its close to impossible to forecast whats going to happen next in the US and around the world, but one safe prediction is that it could finally put DIY carpet on the map.


A year after the area rug market posted double-digit growth, ongoing threats from price erosion created by foreign competition and e-commerce sales saw the category take a 3% dip in 2019.

Historically most of whats been sold in the US has been imported a mix of handmade and machine made with India, Turkey, China and Egypt accounting for the bulk of whats sold, covering price points from entry level to the high end.

Digital channel has seen major uptick amid the coronavirus outbreak, which has seen people around the world sheltering in place, staying home from work and school. While sales initially slumped in the early days of shutdown, the numbers have begun to pick up, in some cases to record levels, as homeowners took the internet for home improvement projects.

And since area rugs can be easily shipped and dont require installation, it makes them desirable for consumers looking to spruce things up.

Resilient Flooring

The resilient category is made up of a wide range of owing types, including VCT, heterogeneous and homogenous sheet goods, rigid and flexible LVT, peel and stick tile, a variety of specliazed vinyl tiles and linoleum.

In 2019, the resilient category continued to grow, though at a lower trajectory, with gains of 3.5%, compared to 26.4% the previous year. However because of the markets response to the tari s. Including importing huge volumes of inventory ahead of the tariffsbeing imposed and enacted. 2018 growth was heavily in ated, and 2019 growth was suppressed. Growth in 2018 and 2019 combined for this category was 31%, averaging to 15.5% per year.

In terms of 2019, it wasnt just high domestic inventory that helped revenue growth. It was also the string shift from WPC and ex LVT to SPC, which has by far the lowest average price points of the three. So there was a lot more growth in volume in dollars.

For decades the fastest growing category has been LVT, and since the invention of the rigid LVT Category by US Floors in 2013, the category has exploded. Black in 2013, LVT accounted for a third of the $2 billion resilient flooring category. Now the category is two and a half times bigger clocking in at estimated $ 5 billion, according to Market Insights and LVT makes up more than 70% of it.

Most of the rigid LVT is consumed in the US market is made overseas largely in China. A substantial volume of flexible LVT is also manufactures in several other Asian countries, as well as in Europe. And there is increasing SPC production in Asian neighbors of China, largely driven by tari uncertainties. All of the big multiplayer domestic manufacturers including those that have started making product in the US get the bulk of their product from outside the US, sometimes from their own overseas operations and sometimes from contract manufacturing with the long standing partners in China.


The momentum closing out 2019, by most continued into the first quarter of this year. Flooring sales were up in both residential and commercial market. Existing home sales were strong in January and strengthened in February, and new home sales also showed strong growth. The market faltered in March with the advent of pandemic. Although the course of the rest of the year is unclear, the March to June home-selling season which accounts for 40% of annual sales, according to National Association of Realtors, will likely be the slowest season since at least the 2007 recession.

While it is impossible to predict how this pandemic will play out and the way in which society will right itself and get the economy going again, including the timeline current conditions have consumers largely sheltering the place. Its a safe bet that this will lead to DIY market. And that includes flooring that can be delivered to homes and installed by homeowners.

This generally means products that click together for floating installations like laminate and rigit LVT.

India Flooring Industry

India flooring market is more than Rs. 300 billion with more than 90% consisting of vitrified and ceramic tiles. It has been anticipated that the Indian Market will grow at a CAGR of 12% to Rs. 477 billion levels due to rising number of residential units and commercial real estate spaces due to increased economic activity in the country.

The Indian floor covering industry has been passing through an exciting period, due to the in ux of newer materials, new products, technology, and specialized machinery.

In India, the growth trends of the floor covering industry have been similar to those of other segments in the construction industry. Increasing emphasis on quality and adherence to strict deadlines, while at the same time sticking to the budget, are factors that are driving the trends in the flooring industry.

The customer needs quality, functionality, and long-term performance, all at competitive prices. Thus, floors that are easy to clean and maintain, and offer excellent wear resistance are in demand.

The healthy growth rate maintained by industrialization and the buoyant urban infrastructure scenario are factors that may help the growth of the market.

Similarly, the increase in metro rail projects and the subsequent demand for quality flooring at metro stations are the emerging applications for the market. One of the trends in the Indian market has been the fact that the commercial flooring segment has been keeping up to the pace of growth of the industrial flooring market.

The growth of the market is expected to increase in the near future. There are several policy initiatives that have the potential to propel the growth of the Indian floor covering market.

India is emerging as a key global market for flooring products.


FY2020 was a year of new initiatives taken by the Company to be future ready which we have discussed in detailed in the earlier sections.

Company continue to build on the differentiation strategy based on branding, innovation and sustainability and increased focus on domestic market. During the FY2020 Company achieved significant growth in bottom line, despite withdrawal of Merchandise Export from India Scheme with retrospective effect which demonstrates the robustness of the business model.

Welspun has always been associated with Innovation and Sustainability which have always been the Companys forte and major driving forces. Company launched ‘Bamboo Charcoal innovation under ‘Spaces brand for which we got strong response from the consumers and ‘Green Spunlace under Advanced Textiles as part of sustainability initiatives. Company also launched Wellness campaign for which it received a positive feedback. It was also conferred with ‘Most Innovative Award for continuous product innovation by Li & Fung and ‘Supplier award for trust by ASDA. The Company was also got rated amongst Top 100 companies in India for Sustainability & CSR by ‘ETFuturescape.

‘Badal Dalo campaign which the company launched during the year for ‘Welspun brand with Mr. Amitabh Bachchan as brand ambassador was well received and as a result it catapulted to Top 2 position in value segment in Home Textile.

HygroCottonR - celebrated its 15 year on January 7, 2020. Having understood the consumers needs and winning their trust across the globe, the company has also accomplished another milestone of achieving $ 1 billion of global sales (FOB) since its introduction. To mark this glorious occasion, the company hosted its celebration at the HEIMTEXTIL trade fair 2020.

Few awards to be worth mentioning are; Awarded ‘Vendor of the year for sustainability by Macys and Awarded for ‘Highest Global Exports from TEXPROCIL for more than 10 years in a row.

The Company has settled the class action claims during the year which came to a closure now.

Welspuns strategy focus is on:

1. Consumer Centricity

As an organisation, WIL believe in understanding the customers needs and live by the ‘customer-first philosophy. Customer centricity is the key to sustainable value creation, as it plays a critical role in designing and creating best-in-class home textile products. Whether we are in a business-to-business (B2B) or a business-to-consumer (B2C) company, an outward looking approach is critical that begin and end with our consumer. Welspuns forward looking approach operate as a ‘strategic partner to its B2B customers. Welspun created Welspotted with the purpose to catch trends and analysing data to be able to tell the partners about basket sizes and what would be in it, right down to the colour

2. Sustainability

Sustainability can easily be dubbed as the second pillar in the Welspun strategy. From a circular economy focus to gender parity and diversity have been on its agenda long enough to auger significant results today. Welspun India Limited has also successfully grown its “Spun” brand, which promotes sustainability and women empowerment.

During the year Welspun India Limited was recognized by ET Futurescape as one of the leaders in sustainability. And we were the only textile company which was ranked in the top 100, with the other FMCG and CPGs.

3. Branding & Innovation

With a brand portfolio of own brands, ingredient brands and licenses, the Company is putting continuous efforts towards establishing growing its B2C presence and create a brand pull.

‘Hygrocotton and ‘Wel-Trak have already marked tremendous success since their respective launches in the international market. ‘Wel-Trak solution has been increasingly accepted by retailers and end customers, which is visible from the fact that it now constitutes 3% of the total revenue of the Company.

Company has recently licensed Martha brand, which actually was present at one of the leading retailers. Martha Stewart is a renowned personality in United States of America with ~3 million followers. This has helped us finding doors opening into Tier-2 retailers where Welspun is not present as well as other Tier-2 discounters.

In September 2019, Good Housekeeping magazine ranked our Hygro towels, the best, softest and most fluffytowels available on the high street. Six of the top 11 towel brands are made by Welspun and happy to inform that they rank among the elite.

On the domestic market front, the Company launched its brand ‘Welspun to capture the value-conscious segment of the Indian customer base. This is in addition to the existing ‘Spaces brand catering to the premium market segment. A lot of work has been done on these two brands which has resulted in a phenomenal growth of >30% during the year. Spaces ‘Bamboo Charcoal innovation and wellness campaign got strong response. Rangana range continues to be one of the bestselling product lines, where we have seen almost three times turn in 45 days which is a kind of record in this category. During the festival season this category has grown at about 74% compared to the same period last year.

The brand ‘Welspun was launched with the first offering as ‘Quik Dry Towel with starting price of just

Rs. 249. The association of Mr. Amitabh Bachchan for Welspun brand has catapulted Welspun brand the second rank in the entire of home textile brand which is in the mass segment. Within less than a year of commencement, we have reached that standing. Till date Spaces is present in around 2000+ Outlets across 350 Cities & Towns. And with our Welspun brand being present in around 2,500+ outlets across 50 cities, it is growing stronger by the day.

In the domestic market company continue to see traction and expect to gain momentum further in the coming years. The Company believes that the Indian market will be its next growth driver and has increased focus with its own brands as well as licenses, including Wimbledon, Minions, Disney, Manchester City and FCB.

As a result of these efforts, share of innovative products was 41% of total sales in FY20.

4. New Markets

The Companys major revenue share comes from the United States, which constitutes around 2/3rds of its sales. The sales composition is as mentioned in the chart:

India has traditionally exported home textiles primarily to EU and USA, which constitute around 81% of Indias home textiles exports among them. India has a dominating presence in USA which is why US has always been Companys major focus area.

As a result the company has grown its market share in US towels market from 15% in CY13 to 19% in CY19 and in US sheets market from 7% in CY13 to 11% in CY19. This implies that every 5th towel and every 9th bed sheet sold in the US is made by Welspun. The Company is expected to continue to gain market share in the US Home Textile market and grow its US business in the long term.

After US, the next big market for the Company is Europe from where the Company gets 17-18% of its revenues. In spite of duty disadvantage, the Company is able to perform well and gain market share with its innovative products portfolio and its own brand ‘Christy.

The Company is eyeing expansion in international in markets such as Japan, China, New Zealand and South Africa to accelerate growth and achieve geographical diversi cation.

Currently, Indian domestic market is also the biggest focus area for the Company. Indian market is very fragmented and majorly catered by the unorganised sector. WIL is making inroads into the domestic market through a portfolio of different brands such as ‘Welspun and ‘Spaces

Apart from the existing home textiles portfolio, the Company has recently commissioned flooring solutions plant, which could provide tremendous growth opportunities in the domestic market as well as the export market.

Our association and campaign with Mr. Amitabh Bachchan has resulted a positive results in our home textile segment, we have also signed him for the flooring business and hopefully that will also provide an impetus to this business as well.

5. New Channels

Since E-commerce will become a reality, omni-channel will be also the way forward. Seeing the growth in this channel, we have expanded the team with a senior expert who has handled portfolio of around $150 million of e-commerce business. We have a digital brand called Welhome that will continue to grow in pure play as well as omni-channel.

Over the last few years, the Company has focused on creating an omni-channel presence by establishing its presence across alternate channels such as e-commerce, hospitality etc.

WIL continues to enhance its offering by providing an omni-channel support to the big-box retailers on Product Development, Warehousing, Pick and Pack, Drop-Ship and Analytics. WILs warehouses in US, UK, Germany and India helped in quickly responding to the orders.

Apart from e-commerce, the Company is working on its hospitality channel as well. Welspuns hospitality division has formed strong bonds with many global hotel chains and are key suppliers of towels, robes, bed linen and filled products to groups such as Hilton, IHG, Marriott, Taj and many more. We expanded current core range to include filled products i.e. Pillows, Comforter and Mattress pads. Through agship English brand “Christy” which will still have own high street stores countrywide is also now a new UK hospitality offering which is available via this established company, with products suitable for industrial laundering. This financial year we saw major business expansion in the Hospitality business in India as well as abroad by way of increased revenues and client additions.


WIL has partnered with Stay Well by being the exclusive supplier of home textiles to them. Stay Well infuses wellness into hotel rooms with features and programs to maximise the guest experience and minimise the impact that travel has on the human body.

6. New Products

WIL strives to add a new product to its portfolio every few years. In line with that, the Company has forayed into the flooring solutions with an aim to become a one-stop flooring solutions provider for domestic and international markets. The residential flooring market is dominated majorly by vitrified tiles, while the commercial & institutional space is dominated by imports of soft carpet flooring. Thus, the existing market provides ample opportunities for innovative flooring solutions and import substitution. In order to capture this opportunity, the Company has invested Rs. 11 billion to manufacture area rugs, carpet tiles and other innovative flooring solutions. The facility is located in the state of Telangana with a capacity of 27 million sq. metres p.a. and is already operational from September 2019. The Company has started to build its brand presence in the segment by showcasing its product portfolio in exhibitions like AceTech across India as well as Domotex, Germany. As part of the sales network, 50 distributors and around 450 dealers have been appointed so far pan-India.

WIL is also building its technical / advanced textiles offerings. These products are used in specialised applications in healthcare, re departments, aerospace, defence and other utilities. These products include features such as re retardants, stain resistants, anti-bacterials, and soil resistants. The year saw a major client win in this area for industrial lters and approval as a supplier by one of the worlds largest players in wet-wipes.

Inclusive Growth

Welspuns social commitment includes sustainability and inclusive growth. A more detailed look at Welspuns sustainability initiatives is discussed in the Business Responsibility Report published separately and uploaded on the Companys website.

During FY 2019-20, the company redefined its Sustainability strategy and roadmap to keep abreast the dynamic stakeholders expectations as well maneuver its sustainability journey to be future ready. The roadmap was designed not only to enable sustainable manufacturing in our operations but also to incorporate it across the companys value chain. Encouraging sustainable products coupled with innovation; utilization of sustainable raw materials; circular economy; lesser GHG footprint; larger reach to communities; accident free workplaces formed the major aspects as a part of this exercise.

The Company believes that sustained economic growth needs an equally sustained ecosystem, thus it weaves sustainability seamlessly into its value chain including sourcing of raw materials, manufacturing processes, supply chain and waste management. It starts with the farm by using sustainable farming practices like educating and assisting cotton farmers in sustainable agronomic know-how, post-harvest handling and access to finance. In order to achieve sustainable sourcing, WIL procures BCI (Better Cotton Initiative) and Organic Cotton from certified external sources.

Responsible Production

Conserving natural resources is the utmost priority to WIL. Further, keeping the communities around WIL operations safe, healthy and driven by development forms an integral part of how the Company conducts business. Several measures like reduction of fresh water consumption in the textile manufacturing (which is known to be a high water consumption process), process modi cation and water heat recovery for energy conversation and aligning to Zero Discharge of Hazardous Chemicals (ZDHC) guidelines have been undertaken.

The company strives to utilize sustainable raw materials like organic cotton, BCI cotton, recycled PET and fabric made of pre consumer waste.

- 30 million liters of water recycled every day at our Anjar factory

- Zero freshwater consumption for manufacturing processes in the Anjar factory - 10,161,351 KL of recycled water in FY 2019-20 - 24,000+ trees planted

Through our energy efficiency initiatives, we have saved 10,548 tonnes of CO2e this year.

On the packaging and logistics part of the business, the Company is incorporating sustainable practices and optimization measures like sustainable packaging using recycled paper and materials from responsibly managed forests, efficient modes of logistics and transportation with reduced GHG (Green House Gas) emissions.

Waste Management

WILs believes a circular economy has to be the underlying mechanism in a companys choice of raw materials as well how value is derived out of waste. In addition to this, the company has also seen social benefits in its own experience towards a circular economy, since it provides employment opportunities and boosts development.

In WILs factories, every kind of waste is assessed to understand ways and means to either reduce, recycle or reuse/ upcycle the same. Horticulture and food waste is converted either to fuel or compost. PET bottles are sent for recycling. The company has also carried out successive trials on using sludge generated from the e uent treatment coal as fuel, which would further reduce the fuel consumption and reduce waste to land ll.

The Company creates products at local village centers with the objective of creating a global brand identity which is in uenced by handicraft traditions of India and yet, contemporary at the same time.

This initiative develops products under the brand “SPUN” and makes use of pre-consumer waste from Companys factories and provides employment opportunities for women in handloom products.


During FY20, the Company saw positive momentum in volumes across geographies which is expected to continue in FY21. The Company maintains its focus on the domestic market and building a strong B2C presence. All the basic building blocks for significant share of B2C business are in place for the Company and its retail business is gathering momentum. WIL will continue to pursue our differentiation strategy based on branding, innovation and sustainability.

Apart from the commissioning of the flooring manufacturing plant during the year, the Company will focus on sweating its existing manufacturing capacities in towels, sheets and rugs.


Risk is integral to any business and WIL is no exception. The Company has evolved robust governance architecture to identify and assess potential risks, and formulate an appropriate mitigation strategy.

The Company secures a significant part of its cotton requirement during the cotton season.
Rising Input Costs WILs backward integration provides 70% of its yarn and fabric requirements. The Companys 80 MW captive power plant at Anjar reduces power costs and provides continous supply.
Labour Availibility The Company is continuously providing its employees vocational training to improve their skill level. It is also focusing on improving labour and reducing attrition. WIL is actively retention employing more women to workforce. The Company has started skill developmet centres where it aims to train 100,000 people in ve years.diversify its
Poor Economic Environment The Company is trying to address this riks through geographic diversi cation into new markets, such as Europe, Australia and Japan as well as the domestic market.
And Consumer Sentiment
Competition Companys strategy of providing end-to-end solutions and innovative products, and maintaining strong relationship with clients helps in reducing competitive risks.
Currency Movements Hedges significant portion of its export revenues expected for the following year.
Change in Indian The Company continuously monitors Govt policies and takes measures to minimize any adverse impact.
Government Policies
Trade Barriers Geographic diversifaction to reduce impact of trade barrier imposed by any particular country.
Operational Risks To ensure high operational efficiency, the internal control team effectively handles the internal processes in terms of technology absorption and capital e ciencies.
Concentration The Company is continously pursuing opportunities in expanding market presence across new geographies in order to mitigate risk.


The Company recognises that human capital is its most important asset. WIL has 21,798 permanent employees on its payroll as on March 31, 2020. The Company has implemented several measures to ensure a positive work environment for all its employees.

The key HR initiatives comprise the following:

Women Empowerment

- Computer Classes: Keeping in view the empowerment of women, computer classes have been arranged for girls living in Gayatri Niwas.

- English Speaking Classes: In todays changing environment, as we all know, English language become a critical medium of communication, to associate with individuals. To facilitate acquiring fluency in the language, we have started English Speaking Course for Gayatri Niwas Girls.

- Dance Classes: With a view of recreation and good physical health, we arrange dance classes for the Gayatri Niwas girls.

Employee Engagement

- ‘Run for Unity (Marathon): On the occasion of Gandhi Jayanti, we have organized Marathon Race. This is in line with our honourable Prime Minister Modi Jis vision towards ‘Swachh Bharat Abhiyan. The ‘Run for Unity Marathon Race started from Rotary Circle, Adipur and culminated in Gandhi Market, Gandhidham.

- Employee Connect: As an HR Initiative, HCGA Team visits employees house for greeting the couple & family on their wedding anniversaries. We believe, this is a gesture of sensitivity and human touch and it gets better with every feedback thereof. This initiative has helped in show casing our Organisations genuine concerns towards its employees.

- ICE Contact: We have come up with another initiative for employee security and its focus is on tracing the employees whereabouts in case of emergency. Under this initiative, we have made it mandatory for all employees to set up their emergency contact numbers on their phone so that any passers-by or stranger may reach out and establish a contact with the employees family in case of any emergent condition. All employees have been covered under this initiative. This is a good initiative which showcases our organisations genuine concern towards its employees safety & security.

- Pravasan Yojna: This initiative has been launched with the intention of extending a help in employees travel. Under the initiative, an associate gets the facility of his travel ticket reimbursed once in every two years.

- Merit Scholarship: This initiative has been launched to recognise and encourage meritorious students. Under the scholarship, Associates children are felicitated with cash prizes, who have scored 70 % and above marks in their 10th & 12th grade examinations. Thus, the bright students are felicitated by the Plant Head.

- Matrutva Vandan Yojna: This initiative has been launched with an intention of appreciating the Motherhood. Under the scheme, every expecting women is felicitated with a cash prize post the birth of child. Thus, every Mother get Rs. 5000/- and Rs. 7500/- the birth of Male and Female child respectively.

Talent Management

- To build capability and to engage with our key talent, we nominate 10 employees for Group Leadership Program (GLP) and 14 employees for Future Leadership Program (FLP).

- For the key talent at Middle Management levels, ‘Achieving Your Leadership Potential (AYLP)program was successfully conducted for the second batch comprising 19 employees.

Learning & Development

- Building digital learning and data Capabilities

i. Self-directed learning using e-Learning platform has been well adopted to build employee capabilities. We successfully achieved 100% activation of 1400 learners on WeLearn, our digital learning platform.

ii. Customized learning program in Digital Marketing was completed for Sales & Merchandizing team to build their capabilities sin the area of e-commerce.

iii. A technology programs calendar with over 100 + programs on SAP covering each module, reporting tools and functionalities was launched across plants & head office

- For Associates in C&S, Skill Gap Analysis was carried out in partnership with Werner International and accordingly training plans have been initiated.

- To build role- based development programs, Functional Competencies for 700 unique roles have been created. This will help in training gap assessment at the employee level to build capabilities.

- For Associates in Cut & Sew area of TERRY TOWEL and RUGS plant, Skill Gap Analysis was carried out in partnership with Werner International. This helped in identifying training plans and work task process analysis.

Health, Safety & Wellness

- A ‘Near Miss Award has been started on the daily basis for Associates to ensure health & safety at all times.

- ‘Champion Award is being given to Associates on the monthly basis. The parameters, to win this award, has been associated with the employees alertness towards the safety measures.

- With the focus on Health & Wellbeing, various schemes like ‘De-Addiction Campaign, ‘Identification of high BMI employees , ‘Health and Hygiene programs for female employee” namely “Sakhi” are run.

- First Aid training was provided to 256 employees through an external agency (‘Indian Red Cross Society) and the attendees were felicitated with completion certificates.

- A Fire Fighting related training program was conducted at plats and thus 283 employees were trained on the basics of Fire Fighting measures.

- Healthify Me is a health and metal wellness initiative aimed at promoting employee health and well- being. Through the app-based platform gamified health challenges were launched which were participated for around 800 employees.

Focus On Women Staff And Associates

- Zumba Classes: It is a step towards ‘FIT WELSPUN MOVEMENT, in line with ‘FIT INDIA MOVEMENT, launched by our Prime Minister. We have started Zumba Classes for Gayatri Niwas and for ‘Sta @ Welpun India.

- Sanitary Napkin Vending Machine: Womens health & hygiene is our first responsibility. Welspun, where more than 700 women employees work and more than 500 girls stay in our girls hostels, arrangements have been made to install sanitary pad vending machines, for the required usage.

- Medical Health Check-up: We organize health check-ups for Gayatri Niwas Girls on monthly basis. Also, separate awareness sessions on different critical diseases i.e Swine Flu, Dengue, Corona Virus etc. get organised.

Penta Protocol Initiation In The Wake Of COVID-19

To reduce the impact of COVID-19 outbreak conditions on our businesses, employees, associates, partners and customers, WIL developed an ‘Infectious Disease Preparedness and Response Plan which laid out protective actions against the virus”.

1. Regular fumigation of colonies, canteens, washroom and maintenance of high standard of hygiene and sanitation.

2. Restrict entry of outsiders including couriers, e-commerce or food delivery agents.

3. Fumigation of buses/other vehicles after each shift.

4. Sanitizers in each bus. To be used by passengers while on-boarding/de-boarding.

5. Compulsory use of face masks by drivers and all passengers.

6. All truck drivers will be medically screened.

7. Sanitization of material vehicle.

8. Thermal screening of all personnel during plant entry gates.

9. Everybody without exception will pass through the disinfectant tunnel.

10. Contact less access control.

11. Workstation and chairs sanitization regularly.

12. Periodic medical screening of canteen staff by the medical o cer.

Cross functional audit on regular basis for ensuring social distancing and compliance.

Future Focus

With new normal, new ways of working are here to stay. Accordingly, we have geared up to create a workplace, which is digitally enabled & where virtual collaboration is powered by technology:

- Remote Working policy has been launched and accordingly staff at Head O ce will be operating as per the roster post lockdown

- Digital employee engagement platform “MyBuddy” to stay connected with employees and listen to them through surveys and ChatBot has been enabled

- Focus towards employee mental wellbeing remains high due to emerging Covid scenario. A

Engagement Calendar, covering digitally enabled activities, such as Global Town Hall, Festival celebrations and Health based webinars by experts have been planned

- Employee birthdays and marriage anniversaries will be celebrated digitally on real time basis by the Supervisors as staff at HO starts operating remotely

- Building Data and Digital capabilities high on priority as WIL focuses on adopting new normal, where real-time analytics, e-commerce and tech-enabled processes / automation are pillars of growth.


The internal control system encompasses the policies, processes, tasks, behaviours and other aspects of WIL that taken together, 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 continuously evolving and as a result, the risks it faces are continuously changing. To make its internal control effective and sound, WIL thoroughly and regularly evaluates the nature and extent of risks to which the Company is exposed. The operation and monitoring of the system of internal control has been taken by individuals who collectively possess the necessary skills, technical knowledge, objectivity, understanding of the Company, industries and markets in which it operates. The quali ed, experienced and independent Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal controls systems and suggests improvements for strengthening whenever required. WIL has a strong Management Information System, which is an integral part of the control mechanism.

COVID-19: Welspun Group Response

- Towards the end of Q4FY20, the operations of the Company were impacted due to shutdown of all plants and offices globally, following the lockdown imposed by government authorities to contain spread of COVID-19 pandemic.

- The Company has since then resumed operations in a phased manner and is operating in accordance with the health and safety guidelines, as issued by the respective government authorities.

- With Welspuns Penta Protocols and contact tracing app WelHeal, we are ensuring complete safety and security of our employees, adopting social distancing norms.

- Welspun stepped up and augmented the prowess of its vertically integrated woven and technical textiles capabilities to make high-quality personal protection equipment like masks, coveralls, etc. and hygiene products such as wipes, disposable linen, etc. under ‘Welspun Health. This strategic pivot is aligned with the organizations aim to cater to consumers as well as front line workers requirements and support the nation and the world in its fight against this global pandemic.

Extreme caution and highest standard of hygiene and safety is being practiced by our staff across all our locations. In order to create awareness and protect our employees, additional efforts have been implemented, as explained below:

- Thermal screening of all employees at entry of all offices and plants

- Following of social distancing norms i.e. minimum 6 ft distance to be followed.

- Compulsory hand sanitization for all at frequent intervals

- Daily periodic sanitization of offices, work-area, company transport, etc.

- Tie-ups with hospitals and medical centers

- Ensuring availability of medical staff round the clock

- Provision of hand sanitizers, N95 masks and medical equipment

- Multiple awareness drives for all employees

- Posters and banners educating on COVID-19 and hygiene


Fy20 saw total income growth of 3.4% and stood at Rs. 68,362 million vs. Rs. 66,084 million in FY19. The Companys EBITDA margin at 19.2% was higher 181 bps YoY, mainly Favorable Exchange Rate due to hedging. This was the sixth consecutive year where the Company generated Free Cash Flow. In FY20, the figure was Rs.2,240 million as compared to FY19 figure of Rs. 773 million.

Herewith is the comparative analysis of Key Financial numbers of FY20 as compared to FY19 based on consolidated figures:

Particulars FY 20 % of Total Income FY 19 % of Total Income
Revenue from Operations (Net) 67,411 98.61% 65,266 98.76%
Other Income 951 1.39% 818 1.24%
Total Income 68,362 100.00% 66,084 100.00%
Cost of materials 32,963 48.22% 33,500 50.69%
Manufacturing Expenses 7,609 11.13% 7,919 11.98%
Employee Cost 7,781 11.38% 7,114 10.77%
Selling Administration and Other
6,911 10.11% 6,084 9.21%
EBIDTA 13,098 19.16% 11,467 17.35%
Finance Costs 1,777 2.60% 1,593 2.41%
Depreciation and Amortization Expense 4,811 7.04% 4,358 6.59%
Taxes 1,700 2.49% 608 0.92%
Pro t before Exceptional items and tax 4,809 7.04% 4,909 7.43%
Exceptional Items 434 0.64% -2,647 -4.01%
Minoritys Share of Pro t/ (Loss) in
170 0.25% 163 0.25%
Certain Subsidiary Companies
Net Pro t 5,074 7.42% 2,098 3.18%
EPS (Basic and Diluted) 5.05 2.09


The below table gives a snapshot of the sales volumes under each product category:

Particulars Unit Capacity FY 2019-20 FY 2018-19
Sales Volume (Approx.)
Terry Towels MT 80,000 67,000 71,000
Bed Linen Products 000 Mts 90,000 67,000 74,000
Rugs & Carpets 000 Sq m 10,000 7,800 6,900

The Effective Utilization levels (based on average annual capacity) in FY20 across products was 84% in terry Towels, 74% in Bed Linen Products and 78% in Rugs & Carpets.


a. Total Income

For FY20, total income was Rs. 68,362 million vs. Rs. 66,084 million in FY19, 3.4% up.

b. Other income

Income from other sources was Rs. 951 million in FY20, as against Rs. 818 million in FY19.


a. Cost of Materials

Consumption of raw materials stood at Rs. 32,963 million during the year. This accounts for 48% of total income for FY20. As a % of total income, this material cost has been lower by approximately 3% as compared to FY19 figure of 51% of total income due to the decrease in input costs, mainly due to the depreciation of the US dollar as many of the input costs are linked to the dollar.

b. Manufacturing Expenses

Manufacturing expense was at Rs. 7,609 million in FY20 as compared to Rs. 7,919 million in FY19. The manufacturing expense includes Power, Fuel and Water charges of Rs. 2,221 million, Dyes & Chemicals of Rs. 2,342 million and labour and job work charges of Rs. 604 million.

As a percent of total income, manufacturing expenses was at 11.13% in FY20 as compared to 11.98% in FY19.

c. Employee Cost

Employee cost stood at Rs. 7,781 million in FY20 as compared to Rs. 7,114 million in FY19. As a % of total income it was 11.38% in FY20 as compared to 10.77% last year.

d. Selling, Administration and Other Expenses

Selling Administration and Other Expenses was reported at Rs. 6,911 million in FY20 as compared to Rs. 6,084 million in FY19. The increase was primarily because of higher advertising and Sales promotion expenses during the year.

e. Finance Costs

Financial Expenses in FY20 was Rs. 1,777 million. The corresponding figure in FY19 was Rs. 1,593 million. The increase was on account of adoption of Ind AS 116 as well as the commissioning of the Flooring Plant

f. Depreciation and amortisation expense

Depreciation was reported at Rs. 4,811 million in FY20 end as compared to Rs. 4,358 million in FY19.


EBITDA in FY20 was reported at Rs. 13,098 million implying EBITDA margin of 19.2%, higher 181 bps mainly due to favorable exchange Rate.

b. Exceptional gain of Rs. 434 million during FY20 is on account of Reversal of excess provision related to provenance

c. Pro t After Tax

Pro t after Tax post minority interest stood at Rs. 5,074 million in FY20 as compared to Rs. 2,098 million in FY19. Net profit margin stood at 7.42% vs. 3.18% in 2019.


Earnings per Share for the year ending March 31, 2020 (Basic) stood at Rs. 5.05 per share as compared to Rs. 2.09 per share at the end of March 31, 2019.


As At
31.03.2020 31.03.2019
1. Non-current Assets
Property, Plant and Equipment 36,326 30,717
Capital work-in-progress 564 4,862
Goodwill on Consolidation 1,803 1,793
Other Intangible assets 477 548
Right-of-use assets 722 -
Intangible assets under development 16 27
Financial Assets
- Investments 8 272
- Loans 2 2
- Other financial assets 1,232 455
Non-current tax assets 684 506
Deferred Tax Assets 1,162 599
Other non-current assets 421 1,335
Total Non-current Assets 43,418 41,117
Inventories 15,287 13,342
Financial Assets
- Investments 2,436 997
- Trade receivables 10,862 10,768
- Cash & cash equivalents 2,051 1,544
- Bank balances other than cash and cash equivalents above 253 188
- Loans 5 5
- Other financial assets 3,224 5,643
Current Tax Assets 21 26
Other current assets 5,546 3,793
Total Current Assets 39,685 36,306
TOTAL ASSETS 83,103 77,423
1. Equity
Equity Share capital 1,005 1,005
Other Equity
Reserves and surplus 29,725 26,235
Other reserves -1,009 553
Equity attributable to owners of Welspun India Limited 29,721 27,793
Non-controlling Interests 848 710
Total Equity 30,569 28,503
2. Non-current liabilities
Financials Liabilities
- Borrowings 14,070 15,537
- Lease liabilities 528 -
- Other financial liabilities 50 35
Non-current tax liabilities 1,526 1,331
Provisions 26 25
Deferred tax liabilities 1,927 2,008
Other non-current liabilities 939 1,049
Total Non-current liabilities 19,066 19,985
3. Current liabilities
Financials Liabilities
- Borrowings 17,717 14,080
- Lease liabilities 260 -
- Trade payables
(a) Total outstanding dues of micro enterprises and small enterprises 179 35
(b) Total outstanding dues of creditors other than micro enterprises 8,799 7,007
and small enterprises
- Other financial liabilities 4,933 4,479
Provisions 1 1,731
Employee benefit obligations 881 721
Current Tax Liabilities 43 61
Other Current Liabilities 655 821
Total current liabilities 33,468 28,935
Total liabilities 52,534 48,920
Total Equity and Liabilities 83,103 77,423


Net worth of the Company stands at Rs. 29,721 million at March 31, 2020 as against Rs. 27,793 million at March 31, 2019.

Net sales to Net worth ratio is 2.30 times for the period ending March 31, 2020 as compared to 2.35 times in FY19-end.

Book Value of equity shares stands at Rs. 29.58 per equity share as at March 31, 2020, which was Rs. 27.66 per equity share in FY19.

The details of movement in various heads of Net worth are as under:

a. Share Capital

The Issued, Subscribed and Paid-up Share Capital as at March 31, 2020 stands at Rs. 1,005 million.

b. Reserves and Surplus

i) Securities Premium account: The Securities Premium account stands at Rs. 3,238 million in FY20, which is same as the figure at the end of FY19.

ii) Capital Redemption Reserve: The balance as of March 31, 2020 amounted to Rs. 488 million, same as at the end of previous year

iii) Capital Reserve: The balance as of March 31, 2020 amounted to Rs. 1,475 million, same as at the end of the previous year.

iv) Foreign exchange translation reserve as at March 31, 2020 stands at Rs. (51) million against Rs. (175) million in the previous year.

v) Pro t and Loss account: The balance in the Pro t and Loss Account as on March 31, 2020 was Rs. 23,592 from Rs. 20,103 million as on March 31, 2019.


Gross Debt as on March 31, 2020 stands at Rs. 34,421 million as against Rs. 33,104 million at end-FY19. The Long term debt stands at Rs. 16,704 million as against Rs. 19,024 million at end-FY19.

Cash and cash equivalents of the Company in FY20 stands at Rs. 4,803 million as against Rs. 2,821 million in the previous year.

Net Debt as on March 31, 2020 stands at Rs. 29,618 million after reducing the cash and bank balance and liquid investment. At the end of FY19, the net debt was Rs. 30,283 million. Net Debt at FY20 end excluding flooring debt was at Rs. 23,304 million.

Net Debt to Equity stands at 1.00 times in FY20 (as compared to 1.09 times in FY19) while Net Debt / EBITDA stands at 2.26 times in FY20 (2.64 times in FY19).


Net block (including Capital Work in Progress) stood at Rs. 36,890 million vs. Rs. 35,579 million in FY19. This increase was mainly on account of capex for the flooring project.


Inventory as on March 31, 2020 stood at Rs. 15,287 million as compared to Rs. 13,342 million in FY19-end. The inventory days were 83 days in FY20 as compared to 75 days in FY19. The Inventory turnover ratio stands at 4.4 times in FY20 as compared to 4.9 times FY19-end.


Sundry Debtors on March 31, 2020 was at Rs. 10,862 million as compared to Rs. 10,768 million in FY19-end. Receivable days/debtor days is 59 days in FY20 as compared to 60 days at FY19. Debtors turnover ratio stands at 6.2 times in FY20 as compared to 6.2 times FY19-end.


Cash and Bank balances and liquid Investment was reported at Rs. 4,803 million as on March 31, 2020. At the end of FY19, the corresponding figure was Rs. 2,821 million.

For the fifth year in a row, the Company generated positive free cash flows after capex.


- Trade payables stood at Rs. 8,979 million as of end-FY20 as compared to Rs. 7,041 million in FY19-end. Trade Payables are at 49 days of net sales in FY20, as compared to 39 days in FY19. The Payable turnover ratio stands at 7.5 times in FY20 as compared to 9.3 times FY19-end.

- Short Term Provisions stood at Rs. 1 million at the end of FY20 as compared to Rs. 1,730 million at end of FY19.


Cash conversion cycle for FY20 was 93 days as against 95 days in the previous year.


The Company has announced the dividend distribution policy, where the payout will be 25% of the standalone PAT. At the end of FY20, the Company has paid the total dividend at Rs. 1.00 per share.


Return on Net Worth stood at 12.2% vs. 9.6% in 2019

KEY FINANCIAL INDICATORS: ( Rs. in million except ratios)

As At
31.03.2020 31.03.2019
Total Income Rs. Mn 68,362 66,084
EBITDA Rs. Mn 13,098 11,467
EBIT Rs. Mn 8,287 7,109
Net Pro t after Tax Rs. Mn 5,074 2,098
Net Worth Rs. Mn 29,721 27,793
Net Debt Rs. Mn 29,618 30,283
Net Debt/Equity Times 1.00 1.09
Net Debt/ EBITDA Times 2.26 2.64
Net Sales/ Net Worth Times 2.30 2.35
Interest Coverage Ratio Times 4.66 4.46
Current Ratio Times 1.19 1.25
Return on Capital Employed (ROCE) % 12.3% 11.1%
Return on Equity (ROE) % 12.2% 9.6%
Inventory Days Days 83 75
Receivable Days Days 59 60
Payable Days Days 49 39
Net Operating Cycle Days 93 95
(Inventory Days + Receivable Days - Payable Days)
Book value per share 29.58 27.66

Note : The days outstanding are calculated on the basis of the Closing numbers ROCE = EBIT (before exceptional) / Average Capital Employed Capital Employed = Net worth + Gross Debt + Other long term liabilities ROE = Total comprehensive income attributable to Owners / Average Net worth


Ratios 31.03.2020 31.03.2019 Remarks / Response
Debtors Turnover 6.3 6.1 No Significant Change
Inventory Turnover 4.4 4.9 No Significant Change
Interest Coverage Ratio 4.66 4.46 No Significant Change
Current Ratio 1.19 1.25 No Significant Change
Debt Equity Ratio 1.00 1.09 No Significant Change
Operating Pro t Margin (%) 19.2% 17.4% Better Operating E ciency has led to higher margins.
Net Pro t Margin (%) 7.4% 3.2% Higher pro tability leading to higher margins
Return on Equity (ROE) % 12.2% 9.6% Higher pro tability leading to higher ROE