Welspun Living Ltd Management Discussions

Economic review

Global economic review and outlook

In CY23, the global economy remained stable despite challenges such as geopolitical conflicts in Europe and the Middle East, supply chain disruptions, and rising interest rates and inflation. GDP grew by 3.2%, indicating a positive economic outlook.

The US exhibited resilient performance, with the IMF estimating real GDP growth at 2.7%. This expansion was driven by increased consumer activity, with rises in domestic income and expenditures. The labour market strengthened, with an addition of 2.7 million jobs over the year. Retail sales in the US, excluding automotive and gasoline, rose by 4.9%. Additionally, inflation-adjusted disposable personal income increased by 4.2%, reflecting greater financial prudence. In China, a surge in consumption and government policies boosted GDP growth to 5.24% in CY23.

The global economy, as projected by IMF, is likely to maintain steady growth of 3.2% in CY24 and CY25.

The possibility of disinflation could lead to adjusted monetary policies, helping economies regain stability and growth. This drop in inflation is likely to absorb effects of fiscal tightening and mitigate the risk of economic slowdown.

Despite ecological concerns, geopolitical shocks, and other threats, the global economy is expected to remain resilient. Advanced economies are predicted to grow by 1.7% in CY24 and 1.8% in CY25, while emerging markets and developing economies are expected to reach 4.2% growth by CY25.

Structural reforms in governance, business deregulation, along with realignments in the labour and credit markets, are expected to enhance growth, ease policy trade-offs, and accelerate the green transition. These reforms are also expected to improve productivity, debt sustainability, and higher income levels, contributing to steady growth and robust global economic activity in the foreseeable future.

Global growth projections (%)

Particulars	Estimate	Projections
	CY23	CY24	CY25
World output	3.3	3.2	3.3
Advanced economies	1.7	1.7	1.8
United States	2.5	2.6	1.9
Euro area	0.5	0.9	1.5
Japan	1.9	0.7	1.0
United Kingdom	0.1	0.7	1.5
Canada	1.2	1.3	2.2
Other advanced economies	1.8	2.0	2.4
Emerging markets and developing economies	4.4	4.3	4.3
China	5.2	5.0	4.5
India	8.2	7.0	6.5

Source: IMF, World Economic Outlook Update, July 2024

Review of macro-economic factors Global cotton production, demand, and prices

Global cotton production for FY24 is estimated at 24.6 million tonnes (MT), a slight decrease from the previous years 25.4 MT. Major producers include China, India, and Brazil. China is expected to produce 6.0 MT, India 5.6 MT, and Brazil 3.2 MT.

Global consumption of cotton is projected to be around 24.6 MT for FY24, indicating a balanced market. China remains the largest consumer with 8.3 MT, followed by India at 5.2 MT and Pakistan at

2.1 MT. Consumption trends indicate stable demand across these major markets. (Source: Asian Markets Securities, Textiles Sector Report, March 2024)

Cotton prices have fluctuated throughout the year. In May 2024, Indian cotton prices were at 88 cents per pound, while US cotton at 73 cents per pound, and Chinese cotton at 103 cents per pound. The premium that Indian cotton previously held over US cotton has diminished to around 20%. This shift has implications for global trade dynamics, with Indian cotton occasionally trading at a discount to US cotton.

Indian economic review and outlook

The Indian economy persevered in 2023 despite global and economic threats. The RBI Estimates the growth rate of 8.2% for FY24. This growth is supported by robust government initiatives and strategic capital allocations aimed at strengthening the nations infrastructural and industrial capacities. Gross GST revenue collections totalled Rs.20.14 lakh crore, reflecting a growth rate of 11.7%. Additionally, UPI transactions and employment rates also rose last year.

PLI Schemes attracted investments totalling over Rs.1.03 lakh crore by November 223. These schemes resulted in production and sales reaching Rs.8.61 lakh crore and employment generation exceeding 6.78 lakh. Contributions from large-scale electronics manufacturing, pharmaceuticals, food processing, and telecom and networking products exports have surpassed Rs.3.20 lakh crore.

Indias retail inflation eased to 4.85% in March 2024, remaining within the Reserve Bank of Indias (RBI) tolerance band of 2-6%. The Composite PMI, which includes both manufacturing and services indices, soared to 61.8 in March 2024, marking its second highest reading in over 13 years.

The nations economic success spurred rebounds in the construction, manufacturing, real estate, hospitality, and transport sectors. Additionally, opportunities for greenfield investors and businesses aided market expansion, mergers, acquisitions, and supply chain diversification, contributing to Indias resilience in FY24.

The Indian economy is strategically positioned to withstand the end of hyper-globalisation by implementing offshore and friendshoring practices. The global impact of climate change has compelled India to focus on reducing carbon emissions and shifting to non-fossil fuel-based power generation and greener energy sources.

Review of macro-economic factors Foreign exchange

As per RBI, the US Dollar rose to 83.04 USD/INR and remains active, while Euro data is reported at 90.32 EUR/INR in March 2024. Pound Sterling stands at 105.58 GBP/INR, averaging 105.32 GBP/INR from January 1, 2024, to March 31, 2024.

The strengthening of the US dollar and Euro often causes emerging market currencies, like the Indian rupee, to depreciate. This rise in the USD is driven by strong US economic data and higher interest rate set by federal reserve. Also, higher domestic inflation rates compared to other countries reduce the Rupees purchasing power contributing to its depreciation.

Indian cotton production, demand, and prices

Indias cotton production in FY24 saw significant activity, with total arrivals reaching approximately 6,647 million kilograms, up from 4,173 million kilograms in the previous year. Despite this increase in production, exports remained relatively modest, constituting about 9% of production, equating to 573 million kilograms, compared to 318 million kilograms in FY23.

The demand for Indian cotton, both domestically and internationally, has shown variability. Domestic consumption remains robust, driven by the textile industrys ongoing recovery and expansion. Export volumes have shown an uptick, particularly in the latter part of FY24, with shipments to China and other key markets. Cotton yarn exports also witnessed an increase, rising from 663 million kilograms in FY23 to 1,214.7 million kilograms in FY24, reflecting strong international demand.

Cotton prices in India experienced fluctuations throughout the year. In May 2024, Indian cotton prices decreased by 3.1% month-on-month, indicating market adjustments and competitive pressures from international markets.

Furthermore, yarn prices in India also reflected a slight decrease, with 40s count yarn prices dropping to Rs.260/kg, marking a 1.4% month-on-month decrease, but with spreads improving to Rs.98/kg.

Industry review

Global retail industry

The Deloitte Global Retail Outlook presents a positive forecast for revenue and profit margins in the sector, attributing this optimism to e-commerce profitability (47%) and expansion into more lucrative revenue channels (34%).

According to a report from the Economist Groups EIU research division, global retail sales are expected to grow 6.7% in CY24 in terms of US dollars. This growth will be driven by slower inflation, and a technology-driven approach that enhances data analysis, pattern recognition, and predictive modelling, enabling rapid processing

of extensive data volumes. These innovations are anticipated to reduce costs and improve customer experience, thereby empowering the retail and e-commerce industries.

Despite monetary tightening, the US remains a top performer in the retail sector, with China and India also leading among emerging markets. The US is a major hub for giant retailers. Retail sales in the US have boomed in the recent decades, jumping from around $3 trillion in 2000 to over $7 trillion in 2022. Thats a rise of more than half a trillion dollars in just a year. While the growth is expected to slow down, sales are still projected to hit $7.9 trillion by 2026. (Source: Statista)

Textile and apparel industry

Global textile and apparel industry

In CY23, the global apparel market was valued at approximately $1.7 trillion, with the United States and the European Union (EU-27) collectively accounting for about 33% of the total market share. The market is projected to exceed $2.3 trillion by CY30, growing at a CAGR of 5% from CY23. This growth is driven by increasing consumer demand, advancements in textile technology, and expanding global trade networks.

The global textile and apparel trade was estimated at $937 billion in CY23, having grown at an average annual rate of 3% since CY17. This trade volume is expected to reach $1.2 trillion by CY30, growing at a CAGR of 4%. Apparel remained the most significant traded category in CY23, representing 59% of the total trade, followed by fabrics at 17%. These figures emphasise the industrys critical role in the global economy and its continuous expansion driven by innovation and consumer trends.

The Chinese market experienced a decline in dollar terms due to currency depreciation. Conversely, markets like Bangladesh and Vietnam have shown resilience and growth, benefiting from shifts in global supply chains. Sustainability practices are increasingly being integrated across the industry, driven by both regulatory requirements and consumer demand.

Consumer awareness driving sustainable textile

The rise in consumer awareness, fuelled by digital media and urgent warnings about global warming, has highlighted the importance of ecologically responsible purchases, particularly among younger generations. This shift in consumer behaviour is driving changes in the textile industry as consumers increasingly prioritise sustainability in their purchasing decisions.

In response to these trends, the European Commission has introduced several directives aimed at promoting sustainable practices within the textile sector. A report published by the Waste Framework Directive in 2023 emphasised the need for a more robust Extended Producer Responsibility (EPR) for textiles, encouraging producers to adhere to stringent rules concerning textile waste management. Additionally, new directives in 2023 set requirements for environmental labelling and restrictions on microplastics and hazardous substances in textiles. These measures are designed to help consumers make more eco-friendly choices when purchasing textile products.

The European Commissions EU Strategy for Sustainable and Circular Textiles aims to achieve sustainable production, distribution, and consumption of textile and apparel products by 2030.

For companies like Welspun, recognising customer needs is crucial in implementing eco-conscious strategies to drive business growth in the textile industry.

By aligning operations with these sustainability goals, companies can meet regulatory requirements and cater to the growing demand for environmentally responsible products.

Indian textile and apparel industry

The Indian textile and apparel market is estimated at $175 billion for FY24, predominantly driven by the domestic segment, which constitutes ~79% ($138 billion) of the total market size. Exports contribute around 21% ($37 billion). Within the domestic market, apparel holds a share of about 74% ($102 billion), followed by technical textiles at 19% ($26 billion) and home textiles at 7% ($10 billion).

Domestic market

The domestic textile and apparel market has expanded from $50 billion in FY11 to $138 billion in FY24, registering a CAGR of 8%. This market is projected to grow further at a CAGR of 9%, reaching $250 billion by FY31.

Exports

Indias textile and apparel exports have grown modestly with a CAGR of 2% since FY11, reaching $37 billion in FY24. The Ministry of Textiles has set an ambitious target to boost exports to $100 billion by FY31, necessitating an accelerated growth rate of 15% annually.

Export composition

• Apparel: Apparel exports are the largest component, accounting for 40% of the total textile and apparel exports, standing at $15 billion.

• Textiles: Textile exports, including yarns, fabrics, and other textile products, make up the remaining $22 billion.

Imports

Indias textile and apparel imports have grown at a CAGR of 7%, reaching $9.5 billion in FY24. The import market is projected to continue growing at a CAGR of 8%, hitting $16 billion by FY31.

Competitive landscape

India is among the top global players in several textile segments:

• Natural fibres: India is one of the top exporters of natural fibres, especially cotton. The countrys favourable climatic conditions and extensive agricultural practices contribute to its robust cotton production. Indian cotton is highly valued for its quality and variety, making it a preferred choice in the international market.

• Yarn: India is a significant exporter of spun yarn, catering to both natural and manmade yarn segments. The countrys advanced spinning technology and abundant raw material supply enable it to produce high-quality yarn. Indian yarn is in demand globally for its consistency and reliability, serving as a vital input for textile manufacturers around the world.

• Home textiles: India holds a strong position in the global home textiles market, which includes products like bed linens, curtains, and towels.

The countrys rich heritage in textile craftsmanship, combined with modern manufacturing capabilities, allows it to produce a wide range of home textile products. Indian home textiles are known for their intricate designs, durability, and cost-effectiveness, making them popular in international markets.

Highlights of Union Budget FY25

The Union Budget FY25 saw a significant 27.60% increase in allocation for the Ministry of Textiles, underscoring the governments commitment to bolstering this critical sector. Key schemes and initiatives include:

1. PM MITRA Park: Aims to create world-class infrastructure with integrated textile value chains, enhancing productivity and global competitiveness.

2. National Institute of Technical Textiles Mission (NITTM):

Focuses on research, innovation, and skill development in technical textiles, promoting advanced manufacturing techniques.

3. Amended Technology Upgradation Fund Scheme (A-TUFS): Provides financial support for the upgradation of technology and modernisation of textile units, boosting productivity and quality.

4. Integrated Skill Development Scheme (ISDS): Targets skill enhancement and training in the textile sector to improve employability and meet industry demands.

5. Rebate of State and Central Taxes and Levies (RoSCTL): Offers rebates on state and central taxes to enhance the competitiveness of Indian textiles in international markets. Its two-year extension reflects a commitment to stable trade policies.

6. Remission of Duties and Taxes on Exported Products (RoDTEP):

Replaces the Merchandise Exports from India Scheme (MEIS) to ensure the seamless refund of duties and taxes, thereby improving export viability.

Additionally, budget provisions for the Cotton Corporation of Indias MSP operations support cotton farming communities, ensuring fair prices and market stability. The emphasis on green power adoption, including bio-manufacturing and renewable energy sources such as rooftop solar and offshore wind, aligns with the governments sustainability goals. Enhancements in logistics infrastructure are also a priority, aimed at reducing transaction costs and improving global competitiveness. These improvements promise to strengthen the manufacturing capabilities, export potential, and sustainability of the textile industry.

Home textiles industry

Global home textiles industry

In FY24, the global market for home textiles was valued at approximately $10 billion and is projected to reach $16 billion by FY31, growing at a CAGR of around 8% (source: Indian Textile & Apparel Industry Report 2024). This growth is driven by rising consumer spending on home renovation and interior decoration, coupled with increased urbanisation and the expansion of the middle class in emerging markets.

Consumers are increasingly preferring organic cotton, recycled materials, and eco-friendly dyes, prompting manufacturers to adopt greener practices. Furthermore, technological innovations like antimicrobial fabrics and smart textiles are gaining traction, offering enhanced durability, stain resistance, and health benefits.

Key segments

The home textiles market is segmented into several categories, including bed linen, bath linen, kitchen linen and upholstery. Bed linen accounts for the largest share of the market, driven by the increasing demand for premium and innovative products. Bath linen follows closely, with growing consumer interest in luxury and eco-friendly products. Kitchen linen and upholstery also continue to be significant segments, contributing to overall market growth.

Regional insights

North America and Europe are the largest markets for home textiles, collectively accounting for over 50% of the global market share. The United States leads in consumption, supported by high disposable incomes and a robust housing market. Europe, Germany, France, and the United Kingdom are key markets, driven by strong consumer awareness of home aesthetics and sustainability. Asia-Pacific is the fastest-growing region, driven by rapid urbanisation, rising disposable incomes, and the expansion of organised retail.

Indian home textiles industry

India is one of the top global exporters of home textiles, with export values reaching $6.2 billion in FY22, making it the second-largest exporter in this category. The countrys home textile exports have grown at a CAGR of 4% since FY11.

The rise of e-commerce platforms has revolutionised the market, providing consumers with a wide array of choices and the convenience of online shopping. This trend is particularly prominent in urban areas and is driving market expansion. Additionally, there is a growing demand for personalised home textile products, driving the market for custom-made items.

Technical textile industry

Global technical textile industry

In CY23, the global technical textiles market was valued at $204.8 billion and is projected to grow at a CAGR of 4.36% from CY24 to CY32.

This industrys transformation and growth are driven by advancements in both natural and synthetic fibres, alongside increasing demand for medical apparel and hygiene products. The integration of cutting-edge technologies like nanotechnology, 3D printing, and biodegradable materials continues to redefine the industry.

Rising urbanisation and population contribute significantly to the market expansion. The booming real estate and commercial sectors further stimulate market growth. Additionally, growing environmental concerns are driving the demand for sustainable and eco-friendly technical textiles across various industries. Asia-Pacific leads this growth in the technical textiles market, driven by substantial investments, modernisation of infrastructure, and a strong emphasis on ecofriendly materials and smarter textile solutions.

As key emerging economies, India and China are experiencing significant advancements in the technical textiles sector, supported by progressive government policies.

Indian technical textile industry

In CY24, the Indian technical textiles industry is experiencing significant growth, driven by increasing industrialisation and urbanisation. The governments emphasis on enhancing infrastructure and manufacturing capabilities is further propelling this trend.

A key driver is the National Technical Textiles Mission (NTTM), which focuses on enhancing research and development, promoting market expansion, and increasing exports. This mission aims to develop high-performance fibres and encourage innovation, thereby boosting the industrys productivity and global competitiveness.

Bharat Tex 2024, a four-day trade exhibition launched by the Indian government, showcases the latest trends and innovations in the textile and apparel sector. Such initiatives are crucial for knowledge sharing and industry networking, fostering growth and development within the sector.

Flooring industry

Global flooring industry

The global flooring market, valued at $415.50 billion in CY23, is projected to grow at a CAGR of 5.6% between CY24 and CY32, reaching $678.50 billion. This growth is driven by urbanisation and infrastructure development, particularly in emerging economies. Innovations in design, such as Luxury Vinyl Tiles (LVT), and eco-friendly options are boosting demand from both aesthetic and sustainability perspectives. As sustainability becomes a priority, the market for environmentally friendly flooring solutions is expanding, with materials like bamboo, cork, and reclaimed wood in higher demand due to their lower carbon footprints and reduced use of harmful chemicals.

Europe leads the market, supported by rising infrastructural activities and initiatives like the National Energy Efficiency Action Plans, which promote the renovation of residential and commercial buildings using sustainable flooring materials. Countries such as India, South Korea, China, and Japan are also experiencing growth in the flooring industry, driven by the expanding hospitality sector and increased construction of houses, hotels, restaurants, offices, schools, and hospitals.

Indian flooring industry

According to Mordor Intelligence, the Indian flooring market is projected to grow from $82.25 million in CY24 to $97.87 million by CY29, at a CAGR of 3.53%. This growth reflects broader trends in the construction industry, with an emphasis on quality, adherence to deadlines, and budget constraints. Customers seek floors that are easy to clean, maintain, and offer excellent wear resistance at competitive prices.

The markets expansion is further strengthened by industrialisation and robust urban infrastructure.

The increase in metro rail projects and demand for quality flooring in metro stations are emerging applications driving market growth. The sector benefits from being capital-intensive yet largely indigenous, with ample raw materials, technical expertise, and infrastructure. Industrial and commercial flooring categories have also seen healthy growth, driven by innovative technologies and specialised equipment, positioning India as a major market for advanced flooring solutions.

Welspun Living Limited, formerly known as Welspun India Limited, is a leading global conglomerate headquartered in India. For over 35 years, the Company has been a leader in innovation, sustainability, and customer satisfaction within the home textiles industry. Our product portfolio spans three major categories: bed, bath, and flooring.

With a team of over 24,000 employees worldwide, extensive consumer research, vertically integrated facilities, and partnerships with major global retailers, we are the largest exporter of home textiles from India.

Our success is driven by our core values of learning, innovation, trust, and endurance. These principles guide us in our mission to create a smarter, sustainable world. We have achieved zero dependence on fresh water for manufacturing and place significant emphasis on eco-friendly practices, seamlessly integrating sustainability across our value chain. The Companys strong financial performance, diversified brand portfolio, and global distribution network further solidify its position as a market leader.

Founded in 1985 with the establishment of Welspun Winilon Mills, the Company has grown exponentially, setting up Asias largest home textile factory and one of the worlds largest diameter SAW pipes mills. Today, Welspun Living Limited continues to lead by example, innovating and expanding with customer-centricity at its core.

Key business and operational highlights

In FY24, Welspun Living Limited achieved its highest- ever annual revenue from operations, growing by 19.6% YoY to reach Rs.9,679.24 crore. This remarkable growth was driven by initiatives across various segments, including the Flooring Business, which saw a 31.4% YoY increase, generating Rs.926.90 crore. The Innovation Business also exhibited impressive performance, with a 65% YoY growth, reflecting the Companys focus on advanced technologies and products.

Welspuns operational efficiency was highlighted by an EBITDA margin of 15.4%, a significant improvement from the previous year, resulting in a 73.3% increase in EBITDA to ^1,514.74 crore.

The Companys strong financial health was further evidenced by a reduction in net debt, which stood at Rs.1,354.25 crore as of March 31, 2024, down from Rs.1,534.33 crore the previous year.

The Domestic Consumer Business showed resilience despite challenging market conditions, achieving a revenue growth of 3.7% YoY, amounting to Rs.570.70 crore. The Welspun brand strengthened its leadership position in India, with a presence in over 500+ towns and 20,000 stores, reaching its highest-ever revenue.

Summary of performance highlights

	Home Textiles			Flooring
Revenue	B2B	Branded	E-Commerce	Advanced Textiles	B2B	Branded
FY24	5,811	1,280	265	449	677	139
FY23	4,731	1,064	395	347	484	124
Growth %	23%	20%	(33%)	29%	40%	12%
Sales contribution FY24	67%	15%	3%	5%	8%	2%
Sales contribution FY23	66%	15%	6%	5%	7%	2%

Summary of operational highlights

Home Textiles	Unit	Annual Capacity	FY24	Utilisation	FY23	Utilisation
Bath Linen	MT	90,000	78,003	87%	56,397	63%
Bed Linen	Mn mtrs	108	74.5	69%	55.2	51%
Rugs & Carpets	Mn sq mtrs	12	10.5	88%	7.2	60%
Advanced textiles	Unit	Annual Capacity	FY24	Utilisation	FY23	Utilisation
Spunlace	MT	27,729	16,483	59%	10,199	37%
Needle punch	MT	3,026	1,465	48%	1,109	37%
Wet wipes	Mn packs	100	21	21%	22	22%
Flooring	Unit	Annual Capacity	FY24	Utilisation	FY23	Utilisation
Flooring	Mn sq mtrs	Installed: 27	10.1	56%	5.7	34%
		Effective: 18

ESG

Welspun Living Limited has embedded ESG principles deeply into its operations, aiming to set a global benchmark for sustainability and responsible business practices. The Companys comprehensive approach focuses on environmental stewardship, social responsibility, and robust governance frameworks. Our sustainability roadmap outlines goals to be achieved by 2030. Through these, we aim to create a positive impact across the value chain.

ESG achievements in FY24 Environmental impact

• Implemented ISO 14001 environmental management systems at all manufacturing sites.

• Achieved fresh water positive status at its flagship facility, utilising a 30 MLD sewage treatment plant.

• Commissioned a 30 MW solar power plant at Anjar and started renewable power usage from CleanMax at Vapi.

• Utilised biomass (agri-pellets) for steam generation.

• Used 81% of cotton from sustainable sources.

Recycled 4,010 million litres of water and saved 1,62,044 GJ of energy through conservation efforts.

Social impact

• Engaged with cotton farmers to grow sustainable cotton across 350 villages, supporting

26,000 farmers.

• Initiated a special programme for Extra Long Staple (ELS) cotton with over 4,000 farmers enrolled.

• Focused on gender diversity, with a large segment of women workers in Cut-&-Sew operations.

• Empowered women in rural communities through the SPUN initiative, enabling them to earn livelihoods by making handicrafts from factory textile scrap.

• Reached over 8 lakh community members through various social initiatives in FY24.

Governance

• Secured a score of 66 in the Dow Jones Sustainability Index (DJSI), placing it among the top 3 percentile of global home textile companies.

• Sustainalytics rating is 11.5 (Low Risk); 16 out of 211 participating companies in textile industry.

• Board committee on ESG and executive remuneration linked to ESG goals.

• Upgraded to an AI-enabled ESG monitoring and reporting tool Credibl.

• Maintained a robust ethics framework and compliance management tool.

Outlook

Looking ahead, Welspun Living Limited is set to expand its market presence through investments in technology and sustainability. A primary focus is the enhancement of manufacturing capabilities, with plans to increase capacity in the Anjar facility by adding a new Jacquard Towel line. This addition is expected to generate Rs.400 crore at full capacity utilisation. Additionally, the Company aims to tap into the growing US market by establishing a new pillow manufacturing facility in Ohio, projected to produce 6.7 million pillows annually and generate $50 million.

Welspun is also committed to increasing the use of renewable energy, targeting 100% renewable energy usage by 2030, and expanding sustainable cotton farming initiatives. Technological advancements, such as the integration of Al-enabled ESG monitoring tools and blockchain for supply chain transparency, will further enhance operational efficiency and product traceability. Moreover, Welspun is focused on driving growth through its e-commerce strategy, aiming to capture a larger share of the fast-growing online market. These initiatives position Welspun Living Limited for robust and sustainable growth in the coming years.

P&L statement

Key financial numbers

Particulars	FY24	% of total income	FY23	% of Total Income
Revenue from operations	9,679.24	98.52%	8,093.76	98.52%
Other income	145.83	1.48%	121.34	1.48%
Total income	9,825.07	100.00%	8,215.10	100.00%
Cost of material	5,109.88	52.01%	4514.03	54.95%
Manufacturing expenses	1,254.75	12.77%	1,052.33	12.81%
Employee cost	1,027.40	10.46%	794.35	9.67%
Selling administration and other expenses	918.30	9.35%	980.51	11.94%
EBITDA	1,514.74	15.42%	873.88	10.64%
Finance costs	153.41	1.56%	129.88	1.58%
Depreciation and amortisation expense	394.49	4.02%	442.14	5.38%
Income tax expense	294.21	2.99%	99.40	1.21%
Profit for the year	672.74	6.85%	202.51	2.47%
Profit is attributable to - Non-controlling interests	(8.36)	(0.09%)	3.68	0.04%
Profit is attributable to - Owners of Welspun Living Limited	681.10	6.93%	198.83	2.42%
EPS (Basic and diluted)	7.06	2.02

Revenue

A. Revenue from operations

Revenue from operation was Rs.9,679.24 crore in FY24, indicating an increase of 19.59% as compared to Rs.8,093.76 crore in FY23.

B. Other income

Other income amounted to Rs.145.83 crore in FY24, in comparison to previous years total of Rs.121.34 crore.

Expenditure

A. Cost of materials

Cost of materials consumed amounts to Rs.5,109.88 crore, constituting 52.01% of the total income for FY24. As a % of total income, the material cost has been lower by 2.94% as compared to FY23, due to the decrease in input costs mainly in cotton prices.

B. Manufacturing expenses

In FY24, manufacturing expenses was Rs.1,254.75 crore in FY24 compared to Rs.1,052.33 crore in FY23. The manufacturing expenses mainly includes Power, Fuel and Water charges of Rs.500.37 crore, Dyes & Chemicals of Rs.312.09 crore and labour and job work charges of Rs.175.30 crore. Manufacturing expenses represented 12.77% of total income in FY24, compared to 12.81% in FY23.

C. Employee cost

Employee cost in FY24 stood at Rs.1,027.40 crore, compared to the previous years total of Rs.794.35 crore. As a percentage of total income, it was 10.46% in FY24 as compared to 9.67% last year.

D. Selling, administration, and other expenses

Selling administration and other expenses were reported at Rs.918.30 crore in FY24 as compared to Rs.980.51 crore in FY23. The decrease was primarily because of lower Freight charges during the year.

E. Finance costs

Finance cost in FY24 were ^153.41 crore compared to last years total of Rs.129.88 crore. Finance cost is increased mainly due to higher volume resulting higher utilisation of working capital loan and increase in the rate of interest.

F. Depreciation and amortisation expense

Reported depreciation in FY24 was at Rs.394.49 crore in contrast to FY23s total of Rs.442.14 crore.

Profitability

A. EBITDA

EBITDA for FY24 amounts to ^1,514.74 crore implying an EBIDTA margin of 15.42%.

B. Profit after tax

Profit is attributable to - Owners of Welspun Living Limited stood at Rs.681.10 crore in FY24 vis-a-vis Rs.198.83 crore in FY23. Net profit margin stood 6.93% opposed 2.42% in FY23.

Earnings per share (basic)

Earnings per share for the year ending March 31, 2024, stood at Rs.7.06 per share compared to Rs.2.02 per share at the end of March 31, 2023.

Balance Sheet

Particulars	As at March 31,2024	As at March 31,2023
A. Assets
1. Non-current assets
Property, plant and equipment	3,511.97	3,611.24
Capital work-in-progress	46.77	45.68
Goodwill on consolidation	188.17	186.13
Other intangible assets	11.75	21.03
Right-of-use assets	101.10	99.38
Intangible assets under development	2.06	0.28
Financial assets
- Investments	7.57	6.83
- Loans	0.38	0.28
- Other financial assets	201.25	69.00
Non-current tax assets (Net)	52.69	40.51
Deferred tax assets (Net)	65.02	122.65
Other non-current assets	44.42	28.87
Total non-current assets	4,233.15	4,231.98
2. Current assets
Inventories	2,071.79	1,969.83
Financial assets
- Investments	908.79	634.68
- Trade receivables	1,254.70	960.46
- Cash and cash equivalents	200.83	146.12
- Bank balances other than cash and cash equivalents above	53.98	35.25
- Loans	1.68	2.10
- Other financial assets	430.27	318.75
Current tax assets (Net)	3.38	6.13
Other current assets	391.47	344.78
Total current assets	5,316.89	4,418.10
Total assets	9,550.04	8,650.08
B. Equity and liabilities
1. Equity
Equity Share capital	97.18	98.81
Other equity
Reserves and surplus	4,418.63	3,989.00
Equity attributable to owners of Welspun Living Limited (Formerly Known as Welspun India Limited)	4,515.81	4.087.81
Non-controlling Interests	97.31	108.22
Total equity	4,613.12	4.196.03
2. Liabilities
Non-current liabilities
Financial liabilities
- Borrowings	832.71	971.95
- Lease liabilities	83.44	81.34
- Other financial liabilities	9.99	9.03
Non-current tax liabilities (Net)	223.65	221.03
Provisions	0.32	0.32
Deferred tax liabilities (Net)	435.48	323.87
Other non-current liabilities	255.24	179.52
Total non-current liabilities	1,840.83	1,787.06
3. Current liabilities
Financial liabilities
- Borrowings	1,687.80	1,378.45
- Lease liabilities	28.29	30.08
- Trade payables	908.82	869.70
- Other financial liabilities	53.66	52.86
Employee benefit obligations	227.58	145.70
Current tax liabilities (Net)	67.77	50.87
Other current liabilities	122.17	139.33
Total current liabilities	3,096.09	2,666.99
Total liabilities	4,936.92	4,454.05
Total equity and liabilities	9,550.04	8,650.08

Net worth

The Companys net worth as at March 31, 2024 is ^4,515.81 crore, compared to FY23s total of Rs.40,87.81 crore.

As of March 31, 2024, the book value of equity shares is Rs.46.47 per share, an increase from Rs.41.37 per share in FY23. The breakdown of changes under different categories for net worth is as follows:

A. Share capital

On March 31, 2024, the Companys issued, subscribed, and paid-up share capital amounted to Rs.97.18 crore.

B. Reserves and surplus

• Securities premium account: The balance stands at Rs. NIL crore in FY24 due to utilisation for Buy back, compared to last years securities premium account of Rs.123.81 crore.

• Capital redemption reserve: The balance as at March 31, 2024 amounted at Rs.164.06 crore, vis-avis FY23s total amount of Rs.162.43 crore.

• Capital reserve: The balance as at March 31, 2024 amounting to Rs.147.53 crore same as last year.

• As of March 31, 2024, the foreign exchange translation reserve amounts to Rs.19.65 crore.

• Retained earnings: The retained earnings reflects an aggregate sum of Rs.4,057.55 crore in FY24, in comparison to last years amount of Rs.3,517.95 crore.

Loan funds

• Gross debt as at March 31, 2024 stands at Rs.2,520.51 crore compared to Rs.2,350.40 crore at the end of FY23. The long-term debt stands at Rs.954. 04 crore vis-a-vis Rs.1,116.20 crore at the end of FY23.

• Cash and cash equivalents of the Company in FY24 stands at Rs.1,163.60 crore vis-a-vis Rs.816.05 crore in the previous year.

• As at March 31, 2024, the net debt stands at Rs.1,354.25 crore.

• In FY24, the net debt to equity ratio stands at 0.30, (vis-a-via 0.38x in FY23), while the net debt/EBlTDA ratio stands at 0.90 this year, in comparison to 1.76 in FY23.

Fixed assets

Net block (including Capital Work in Progress) stood at 3,558.74 crore in FY24 vis-a-vis Rs.3,657.02 crore in FY23.

Inventory

This fiscal years inventory rose to Rs.2,071.79 crore, from FY23s total amount of Rs.1,969.83 crore. Days of inventory stands at 78 in FY24, compared to 89 days last year. The inventory turnover ratio stands at 4.66x in FY24 vis-a-vis 4.11 x at the end of FY23.

Trade Receivables

Sundry debtors on March 31, 2024 were at Rs.1,254.70 crore vis-a-vis Rs.960.46 crore at the end of FY23. Receivable day/debtor days is 47 days in FY24 compared to 43 days in FY23. Debtors turnover ratio stands at 7.69x in FY24 vis-a-vis 8.43x at the end of FY23.

Trade Payables

Trade payables stood at 908.82 crore as at March 31, 2024 vis-a-vis Rs.869.70 crore in FY23.

Buy back and dividend

The Companys dividend distribution policy stipulates a 25% pay-out of consolidated PAT. During the year, the Company had bought back 1,62,50,000 equity shares at a price of Rs.120 per equity share and total amount utilised in buy-back was Rs.195.00 crore (excluding expenses).

Key financial indicators

Particulars	FY24	FY23
Total income (Rs. in crore)	9,825.07	8,215.10
EBITDA (Rs. in crore)	1,514.74	873.88
EBIT (Rs. in crore)	1,120.25	431.74
Net profit after tax (Rs. in crore)	681.10	198.83
Net worth (Rs. in crore)	4,515.81	4,087.81
Net debt (Rs. in crore)	1,354.25	1534.33
Net debt/Equity (in times)	0.30	0.38
Net debt/EBlTDA (in times)	0.90	1.76
Net sales/Net worth (in times)	2.18	2.01
Interest coverage ratio (in times)	7.30	3.32
Current ratio (in times)	1.72	1.66
Pre-tax ROCE (in %)	14.6%	5.7%
ROE (in %)	15.8%	4.9%
Inventory days (in days)	78	89
Receivable days (in days)	47	43
Payable days (in days)	34	39
Net operating cycle i.e. inventory days + receivable days - payable days (in days)	91	93
Book value per share (Rs.)	46.47	41.37

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

Changes in key financial ratios

Ratios	As of March 31, 2024	As of March 31, 2023	Remarks
Debtors turnover	7.69	8.43	Reflect impact of higher volume resulting higher debtors
Inventory turnover	4.66	4.11	Reflect impact of higher volume
Interest coverage ratio	7.30	3.32	Reflect impact of higher margin
Current ratio	1.72	1.66	Reflect impact of higher Trade Receivables and Inventory
Debt equity ratio	0.30	0.38	Reflects reduced net debt
Operating profit margin (%)	15.42	10.60	Reflect impact of lower input cost
Net profit margin (%)	6.93	2.40	Reflect impact of lower input cost
Return on average equity (%)	15.83	4.90	Reflect impact of higher net profit margin

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

Risk management

Risk categories and mitigation

Risks	Mitigation strategies
Concentration risk, with heavy dependence on few geographies and customers	The Company is concentrating on developing markets other than USA. Emphasis is also being put on Diversification of Channels- Retail, Hospitality, E-commerce, New Product categories, Licensed and Own Brand development. We have special focus on emerging businesses in Flooring, Advanced Textiles, Retail and Brands.
Increased demand for sustainably manufactured products, resulting from changing consumer mind-sets.	We have embarked on a strategy to procure more organic cotton under BCI. In line with its journey towards carbon neutrality, the Company has entered into a JV to supply Renewable Energy upto 70% of our annual requirement at our Flagship plant at Anjar by the end of year 2025. We have started using recycled cotton in our manufacturing operations.
Volatility in cotton prices may impact profitability adversely	We have a well-structured continuous monitoring of Cotton market situation locally as well as internationally and take the timely action. We have started using recycled cotton in our manufacturing operations. We are in process of developing products that aim at using fiber which goes very close to the quality of cotton fiber.
Risk related to Stiff competition in Domestic retail business and sustainable long term growth in domestic retail business	The Company has an ambitious plan to increase share of domestic market. Welspun has launched products for India market which are specifically designed for Indian customers. We have a structured plan with efforts such as aggressive Scaling Up Distribution network, Innovation and Shelf share enhancement. New products pipeline and major OPEX plan for Brand building and Promotion.
Risk related to Logistics Operations Geopolitical Issue are affecting the overall Logistics function worldwide resulting into Non availability of Vessels on a timely basis (Blank Sailings), Higher turnaround time because of change in route and Higher Freight rates from the Ocean liners impacting overall profitability of business	We have fixed Price contracts with all major ocean liners and we are having close co-ordination with liners to enable us to take prudent business decisions. We are tightening our forward planning mechanism for advance clarity on the requirement of containers for a foreseeable future period of time.
Foreign Currency Risk / POEM related regulations	There is a foreign exchange risk policy to govern the fluctuations which is approved by board. Current situation in the market is very volatile and there is a continuous monitoring mechanism and swift action matrix in place. Policies are in place for ensuring the compliance of POEM regulations.
Risk related to ESG: Unforeseen weather events due to climate change such as excessive rain, flooding which will cause business disruption/ Regulatory changes across the world such as imposition of carbon tax in developed markets	Implementation of Board approved Road map for Carbon Neutrality for having 70% energy coming from renewable resources by 2025. We are working on using more and more organic cotton.

Welspun Living Limited prioritises human resources, recognising the workforce as a critical component of our success. With a diverse team of over 24,000 employees, the Company fosters an environment that values inclusivity, innovation, and continuous learning. Notably, more than 25% of our workforce comprises women, particularly in Cut-&-Sew operations. This commitment to diversity has earned Welspun recognition as a certified Great Place to Work, and we are consistently rated among the top 100 companies in India across various parameters.

Our human resources strategy is founded on four core principles: Learning, Innovation, Trust, and Endurance. We encourage our employees to learn, unlearn, and relearn, cultivating an atmosphere where innovation flourishes. Transparency and ethical practices are paramount, ensuring trust is a cornerstone of our corporate culture. Additionally, Welspun promotes endurance, inspiring our workforce to push beyond their limits and continually strive for excellence. Through these principles, Welspun Living Limited drives business success while also supporting the personal and professional growth of our employees.

The Companys internal control system comprises a comprehensive array of policies, processes, tasks, behaviours, and organisational elements designed to ensure effective and efficient operations, high- quality internal and external reporting, and strict compliance with relevant laws and regulations. Given the dynamic nature of the Companys objectives, internal structure, and operational environment, the associated risks are continuously evolving. To maintain robust and sound internal controls, the Company routinely and thoroughly assesses the nature and extent of these risks.

Internal control operations and monitoring are conducted by individuals who collectively bring the requisite skills, technical knowledge, objectivity, and a deep understanding of the Companys operations and the industries and markets in which it operates. Additionally, the Audit Committee of the Board of Directors, composed of qualified, experienced, and independent members, actively reviews the adequacy and effectiveness of the internal control systems, recommending improvements as necessary.

Integral to the Companys control framework is its robust Management Information System, which supports and enhances the overall control mechanism, ensuring that management has accurate and timely information to make informed decisions.