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00:00Welcome back. You're watching the Small and Mid-Cap show. Well, one company that came
00:12out with its Q1 FY25 earnings yesterday is Wellspun Living. Well, the revenue was up
00:18around 16 percent, EBITDA up roughly around 10 percent. Margins have taken a slight hit
00:23from 14.2 percent to 13.4 percent and net profit was up 14 percent. But to discuss more
00:30about how the quarter has gone by, we're joined by Dipali Goenka, CEO and MD at Wellspun Living
00:37who joins us now. Welcome to the show, Dipali. My first question to you, Dipali, is that
00:42give us some color as to how the quarter has gone by, how different segments, textiles
00:47and flooring has played for the entire company. So, first of all, our net top line is around
00:542,588 crores, around 17 percent growth year on year and our EBITDA on consolidated is
01:00around 15.2 percent, which is around absolute number 393 crores, 15 percent year on year
01:07growth. If I look at the businesses that we have, let me give you a color on home textile
01:12segment, which is consolidated with advanced textile, retail and flooring, which is around
01:182,387 crores, up 17 percent year on year. And if I look at pure core home textile revenue,
01:25which is at 19 percent year on year, with a growth of around, with an EBITDA of around
01:2917 percent. I think when I look at these numbers, so if I talk about exports, which is
01:36overall up by 10 percent and where USA, along with USA, the other geographies like UK,
01:43Europe and the rest of the world also grew by double digit. Emerging businesses grew
01:49by 7 percent. And that is where, you know, we saw a little, little slowdown in the terms
01:55of our growth. But however, we are geared up to our numbers that we talked about as
01:59a growth of 12 percent on an overall and with a 15 to 15 and a half percent EBITDA.
02:07And now, if I can tell you that, you know, the Red Sea has been a biggest challenge that
02:13we saw in this last quarter, which hopes to get, you know, streamlined by end of August.
02:19So I think we'll be pretty OK by then. But however, it caused a little impact on the
02:25terms of shipments, because if we saw a growth of 17 percent, it could have been better.
02:31Same thing as an impact as a rub off on flooring. And of course, on our working capital, which
02:36actually then, you know, impacted our net debt as well.
02:40Right. Can you help me quantify that impact in Q1 itself because of the Red Sea crisis
02:46so far? I didn't hear you. Can you just repeat?
02:49Can you quantify that impact of Red Sea crisis in Q1 FY25 for me in terms of revenue and
02:55bottom line? I think I can talk about, you know, if, you
02:59know, our numbers would have been like today we are at 17 percent growth.
03:03They could have been at a 20 percent today. And I mean, you can imagine the kind of working
03:07capital that you definitely then have to carry on as an exposed to the inventory.
03:13That's where the impact is. I can't quantify that to that extent.
03:17But definitely there has been an impact, which we which we know and we are aware of, which
03:22we'll be able to overcome in the next quarter. Got it.
03:24And, you know, with respect to your flooring revenue, it's grown around 1.2 percent.
03:28However, FY24 had witnessed quite a significant growth in the flooring business.
03:34So do you think that this was tepid as compared to that?
03:38And going forward for the entire full year FY25, what is the expectation from that business?
03:44So we are on track for the growth that we're talking about flooring.
03:48I think our flooring business actually had the biggest impact of the Red Sea in the terms
03:54of exports. But however, our domestic business, actually
03:58a domestic flooring actually showed a growth of around 15 percent y on y, which I think
04:04is a great, great positive for us in the terms of the Indian market as well.
04:09And we are absolutely on track to achieve what we have to.
04:12Got it. And with respect to the segmented revenue, you know, 91 percent of your revenues
04:17still come from the textile segment and 9 percent from the flooring business.
04:20Do you see any kind of change in the segmental mix going forward?
04:24Yes, absolutely. So while when we talk about our businesses today and if you see it more
04:31than, you know, around 90 percent comes in from exports as we as we see, we are looking
04:37at India, India's story, which is so huge, contributing.
04:41I think it's got disconnected.
04:43Right. I think you're still on air. You can go ahead.
04:47So, you know, we are in the revenue actually contributing or will contribute around 10
04:53percent of our top line. And I think that's where today, if I talk
04:56about the revenue numbers of retail today is 5 percent of that today.
05:00And I will see that grow to 10 percent as also our top line grows toward a journey of
05:0515,000 crores by 2027.
05:09OK, interesting, 15,000 crores by 2027.
05:12You know, since you said, you know, your focus is on India growth story.
05:16I just want to understand that, you know, in the recent budget, there was a significant
05:20increase in the PLI scheme for textiles, you know, as compared to the interim budget, it
05:24was almost nine times of allocation. So I want to understand that.
05:28Will you be tapping into for the PLI schemes first thing?
05:32And how will this benefit you if if at all you're planning to, you know, invest in
05:36that segment?
05:41So I'll tell you one thing we've been talking about PLI.
05:43It is definitely going to be an impact on the man-made fibers.
05:46And that is the opportunity that we see here.
05:48Now, when we talk about wellspun living primarily, we are primarily majorly into cotton.
05:54And I think that's where we will see.
05:55But I think it will have a rub off on advanced textiles and flooring businesses.
06:00Having said that, when I look at the recent budget, I definitely want to applaud,
06:05you know, our finance minister regarding the kind of opportunity that they're giving in
06:09the terms of the boost up for the, you know, our skilling and, you know, the manpower,
06:15because I think India is going to is a center for the outsourcing and the supply chain hub
06:22for global actually.
06:23And it is absolutely at the epicenter of the supply chain considerations for everybody.
06:29So I see that is a very big one for us, you know, in the terms of people and the
06:35skilling that we see.
06:36And, of course, for women and the kind of infrastructure boost and the support that
06:41the government is going to give.
06:42So, yeah, definitely, I would see that as a very big opportunity for us as we build
06:48our complete skilling and efficiency in the entire manufacturing system.
06:53Right. Absolutely.
06:54And, you know, one last question, you know, custom duties on various, you know,
06:59textile raw materials have also come down.
07:02Any of these benefiting you?
07:04See, primarily, I'll tell you, for us, we are 100 percent self-sufficient,
07:09completely integrated as manufacturing.
07:13A few come in for flooring and that also is getting indigenized.
07:16So it is definitely, it will be there as an opportunity.
07:20But I think primarily we're very self-sufficient there.
07:24OK, well, Dipali, thank you so much for giving us those insights and all the best for FY25.
07:29And thank you so much for taking your time and speaking with us at NDTV Profit.
07:33But with that, it's time to slip into a short break.
07:37Before that, remember, India Bulls Housing Finance Limited is now Samman Capital Limited.
07:43Jio Samman Se and keep watching NDTV Profit for all your business and stock market updates.