10% Eruption on Welspun India ratings by India Ratings

In intra-day trade on Friday, shares of Welspun India (WIL) rose 10% to Rs 84.65 on the BSE after rating agency India Ratings & Research, a Fitch Group firm, upgraded the company’s long-term credit rating from INDIA- to IND AA with a positive outlook. The textiles company’s stock was trading near its 52-week high of Rs 87.60, set on March 15.

The upgrade reflects WIL’s better-than-Ind-Ra-expected balance sheet deleveraging through a strong operational performance including capacity utilisations, sales and operating margins post the unlocking of economic activities, as well as, improved working capital management.

The upgrade represents WIL’s better-than-expected balance sheet deleveraging, as measured by capacity utilisations, revenue, and operating margins following the unlocking of economic activities, as well as strengthened working capital management.

There has been a visible fundamental change in consumer spending for home goods since the rise of the homebody economy. Despite a seasonally weak quarter, the company delivered a strong output in the October-December (Q3FY21) quarter, clocking its highest ever quarterly revenue in the company’s history.

While announcing Q3 results on January 27, management said it would continue to advance the company’s operating models to the rapidly evolving market environment while rising capacities to meet growing demand, citing increased emphasis on innovation, ESG, and the fast-growing e-commerce channel.

WIL is Asia’s largest home textiles company and one of the world’s top two textile firms. The business is India’s largest exporter of home textile goods, selling to 17 of the top 30 global retailers, reducing counterparty risk.

WIL is the largest home textiles company in Asia and among the top two textile companies worldwide. The company has been India’s largest exporter of home textile products and exports to 17 of the top 30 global retailers, thus lowering the counterparty risk. WIL has a healthy scale of operations and a diversified product mix comprising terry towels, bed linen. Furthermore, the fact that WIL’s environmental, social, and governance risks are low reflects a stable and long-term business profile.