Welspun Living (WELSPUNLIV) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue declined 16.4% year-on-year to ₹2,456 crore, mainly due to global tariff headwinds, especially a 50% U.S. tariff, and weak retailer offtake, though revenue improved 7.3% sequentially.

• EBITDA margin dropped to 6.8% from 14.3% YoY, with EBITDA down 60% YoY, reflecting tariff-led volume pressure, adverse mix, and operating deleverage.

• Profit after tax after minority interest was ₹13 crore, down 93.5% year-on-year, with PAT margin at 0.5% versus 6.8% last year.

• Domestic business declined 3.7% YoY, but domestic flooring grew 14.3% YoY.

• Strategic focus remains on innovation, brand-led growth, sustainability, and new leadership appointments to drive financial discipline and growth.

Financial highlights

• Q2 FY26 total income: ₹2,456 crore (down 16.4% YoY); EBITDA: ₹168 crore (margin 6.8%, down from 14.3% YoY); PAT after minorities: ₹13 crore (down 93.5% YoY); EPS: ₹0.13.

• Net debt reduced to ₹1,570 crore as of Sep 30, 2025, from ₹1,832 crore a year earlier.

• Free cash flow improved to ₹158 crore from ₹112 crore in March 2025.

• H1 FY26 total income: ₹4,740 crore (down 14.2% YoY); EBITDA: ₹254 crore (margin 5.4%); PAT: ₹88 crore (down 85.2% YoY).

• Capex for the quarter was ₹87 crore, focused on efficiency and renewable energy projects.

Outlook and guidance

• Near-term pressures from tariffs and muted U.S. consumer sentiment are expected to persist, impacting both top and bottom lines.

• Margin recovery is anticipated once tariff issues are resolved, with a return to normal margins expected in the medium term.

• Management remains focused on cost discipline, operational efficiency, and leveraging innovation and diversification for future growth.

• Domestic consumption is expected to pick up post-GST stabilization, with a 20% growth target and ₹1,000 crore revenue in the next two years.

• Q3 is expected to be similar to Q2 in terms of top-line, with a possible 10% variance.