Welspun Living Limited reaches net cash as cycle hits 44 days

Welspun Living Limited reported Rs 2 crore of net cash at September 2026, reversing net debt of Rs 775 crore at March 2026. Cash and equivalents rose to Rs 1,906 crore, marginally above Rs 1,905 crore of gross debt, while the cash conversion cycle declined by 38 days to 44 days.

How did Welspun Living reach a net-cash position?

Welspun Living reached a net-cash position because its Rs 1,906 crore of cash and equivalents at September 2026 exceeded gross debt of Rs 1,905 crore. The resulting reported net debt was negative Rs 2 crore, indicating net cash, compared with Rs 775 crore of net debt at March 2026. Gross debt increased over the six months, but cash increased by more.

Cash and equivalents rose by Rs 879 crore from Rs 1,027 crore in March 2026, while gross debt increased by Rs 103 crore from Rs 1,802 crore. Net worth also increased to Rs 5,066 crore at September 2026 from Rs 4,917 crore at March 2026. The reported net-debt-to-equity ratio consequently moved to 0.00 times from 0.16 times at March 2026.

The September 2026 position follows a longer, uneven reduction in reported debt. Net debt declined from Rs 2,229 crore in FY22 to Rs 1,354 crore in FY24, then increased to Rs 1,603 crore in FY25 before falling to Rs 775 crore in FY26. September 2026 is the first point in the displayed trajectory where cash marginally exceeded gross debt.

Why did Welspun Living’s cash conversion cycle fall to 44 days?

Welspun Living reported a 44-day cash conversion cycle at September 2026, down from 82 days at March 2026. The 38-day reduction puts the latest measure below the 80-to-94-day range reported from FY21 through FY26. The presentation does not disclose September 2026 inventory, debtor or payable days, so it does not specify the working-capital mechanism behind the reduction.

At FY26, Welspun Living reported 84 inventory days, 51 debtor days and 53 payable days, producing an 82-day cash conversion cycle. In FY25, it reported 76 inventory days, 57 debtor days and 39 payable days, producing a 94-day cycle. Compared with FY25, FY26 had six fewer debtor days and 14 more payable days, while inventory days increased by eight.

The latest measure is also lower than the 93 days reported in FY21, 80 days in FY22, 93 days in FY23 and 91 days in FY24. Net current assets, excluding cash and cash equivalents, had already decreased to Rs 1,817 crore in FY26 from Rs 2,939 crore in FY25. The source provides neither a September 2026 net-current-assets figure nor a cash-flow statement that reconciles the six-month change.

How did Welspun Living perform in Q2 FY27?

Welspun Living reported Q2 FY27 total income of Rs 2,870 crore, up 16.9% year on year, while earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 120% to Rs 370 crore. EBITDA margin expanded to 12.9% from 6.8%, an increase of 604 basis points. Profit after tax after minority interest and exceptional items rose to Rs 169 crore from Rs 13 crore.

Finance cost fell 21.8% year on year to Rs 34 crore in Q2 FY27, while cash profit rose 148% to Rs 273 crore. The presentation defines cash profit as profit before depreciation and tax less current tax. These earnings figures provide context for the September balance-sheet position, but the source does not attribute the increase in cash or the shorter conversion cycle to a particular profit-and-loss line.

Home Textile accounted for 93% of Welspun Living’s Q2 FY27 revenue split and remained its larger reported segment. Revenue rose 15.8% year on year to Rs 2,689 crore, while EBITDA increased to Rs 323 crore from Rs 152 crore and margin reached 12.0% from 6.6%. Flooring revenue increased 19.3% to Rs 216 crore, with EBITDA rising to Rs 23 crore from Rs 4 crore and margin reaching 10.8%.

For H1 FY27, Home Textile revenue was Rs 5,369 crore, up 20.8% year on year, and its EBITDA margin was 11.9%, compared with 8.4% in H1 FY26. Flooring revenue was Rs 404 crore, up 7.7%, while its margin increased to 10.6% from 5.3%. Both segments improved margins, although Home Textile generated the larger absolute revenue and EBITDA contribution.

What should Welspun Living watch after reaching net cash?

Welspun Living identifies fibre and freight costs as swing factors because the West Asia conflict has kept Brent crude oil volatile. Its Q2 FY27 operating-environment presentation also lists a 10% Section 301 tariff for India, Pakistan and Bangladesh from July 24, 2026, against 12.5% for China, Vietnam and Turkey. These conditions concern future costs and export markets rather than identified causes of the September net-cash result.

Operating utilisation provides another measure for subsequent reporting periods. In Q2 FY27, Bath Linen operated at 83% utilisation, Bed Linen at 77% and Rugs and Carpets at 74%, while Flooring operated at 51%. Advanced Textile utilisation was 45% for Spunlace, 35% for Needle Punch and 18% for Wet Wipes.

The Pillow facilities in Ohio and Nevada operated at 67% utilisation in Q2 FY27, while Nevada fully commenced production on June 15, 2026. Welspun Living also reported return on capital employed, or ROCE, of 12.7% at September 2026, compared with 5.6% at March 2026, and return on equity, or ROE, of 13.4%, compared with 4.2%. The presentation defines ROCE as earnings before interest and tax divided by average capital employed, and ROE as net profit divided by average net worth.

Conclusion

Welspun Living’s September 2026 balance sheet shows a move from Rs 775 crore of net debt at March 2026 to Rs 2 crore of net cash, as cash and equivalents reached Rs 1,906 crore against Rs 1,905 crore of gross debt. The 44-day cash conversion cycle, down from 82 days six months earlier, was the other central balance-sheet change, alongside higher Q2 FY27 earnings and segment margins.

The next disclosures will show whether the 44-day cycle and marginal net-cash position continue as cash, debt and working-capital components change. Management’s disclosed matters to watch include fibre and freight volatility, utilisation following Nevada’s June 2026 production commencement, and its 2030 goals of 100% renewable energy and 100% sustainable cotton.