Welspun Living Navigates Q2 FY26 Amidst Global Headwinds

Welspun Living Limited, a prominent player in the home textiles sector, reported a challenging second quarter for fiscal year 2026, grappling with persistent global tariff headwinds and a cautious demand environment, particularly in its key export markets. The company's consolidated revenue for Q2 FY26 stood at 2,455.7 crore, marking a 16.4% decline year-on-year. This moderation in revenue was observed across all business segments, although there was a sequential improvement of 7.3% from the previous quarter. Profitability was also impacted, with EBITDA slipping to 168.1 crore, a 60% drop year-on-year, and EBITDA margins contracting significantly by 748 basis points to 6.8%. The profit after tax (PAT) saw a steep decline of 93.5% year-on-year, settling at 13 crore.

The company's core home textile exports business experienced a 15.4% year-on-year decline, generating 2,043 crore in revenue, with an EBITDA margin of 7.8%. The advanced textile business also saw a 19% year-on-year decline, contributing 120 crore. In contrast, the domestic consumer business declined by a modest 3.7% year-on-year. Within this, domestic home textile sales fell by 9%, but domestic flooring demonstrated robust growth of 14.3% year-on-year. The overall flooring business recorded a revenue of 181.3 crore in Q2 FY26, with an EBITDA of 3.8 crore. The management attributed the margin pressure to the tariff impact, adverse product mix, and operating deleverage.

Strategic Resilience and Operational Focus

Despite the challenging external environment, Welspun Living emphasized its strategic focus on strengthening cost controls, enhancing operational efficiencies, and driving agility across its value chains. The company highlighted its strong customer relationships and competitive moat, which enabled it to retain market share in the U.S. even amidst the 50% tariff on Indian exports. Management expressed optimism regarding the potential for progress on the Indian-U.S. bilateral trade agreement to restore stability to trade flows.

Welspun Living is actively pursuing geographic diversification, deepening its footprint and supply chain capabilities across the U.K., Europe, GCC ANZ, and Japan. This strategy has shown early success, with the company's dispatches to the EU growing over twice the market rate between January and July 2025. The luxury heritage brand, Christy, demonstrated strong growth momentum of over 40% year-on-year, supported by online growth and offline expansion in stores like Bloomingdale's and John Lewis.

Financial and Operational Highlights (Q2 FY26)

Segmental Performance Overview (Q2 FY26)

Innovation and Sustainability as Growth Drivers

Welspun Living continues to expand its portfolio into high-potential categories such as fashion towels, utility bedding, and pillows. The Jacquard plant commenced operations in July 2025, positioning the company as a global leader in terry towel manufacturing. The Ohio Pillow facility has reached nearly 50% capacity utilization, with further expansion in Nevada expected to significantly boost the pillow business. The company's focus on value-added categories in advanced textiles, such as hygiene and filtration, is aimed at building a strong innovation pipeline.

ESG remains a core pillar of Welspun Living's strategy. The company is making steady progress towards its 2030 goals of 100% renewable energy and 100% sustainable cotton. In Q2, the Hyderabad facility achieved 93% green energy use, and the Anjar facility is transitioning to 80% round-the-clock renewable power. Notably, 97% of the cotton sourced during the quarter was sustainable.

Outlook and Leadership Transition

While the external environment is expected to remain fluid, management is confident in its strategic positioning. The domestic market in India is seen as a bright spot, with GST rate rationalization expected to enhance affordability and accelerate the shift towards organized players. The domestic flooring business, in particular, is anticipated to continue its strong growth trajectory, especially in the hospitality sector.

In a significant leadership development, the Board has appointed Mr. Manish Bansal as the new Chief Financial Officer of Welspun Living, effective January 1, 2026. Mr. Bansal brings over 15 years of experience across various leadership roles within the Welspun Group, and his appointment is expected to further strengthen the company's focus on disciplined execution, cost control, and sustainable growth.

Welspun Living's Q2 FY26 performance reflects the impact of external challenges, yet the company's strategic initiatives in diversification, innovation, and sustainability, coupled with a strong operational focus, position it to capture recovery as market conditions stabilize. The management's commitment to maintaining market share and strengthening its balance sheet underscores its long-term vision.