Welspun India Ltd board approves plan to expand towel manufacturing capacity

The Board of directors of Welspun India Ltd at its meeting held today i.e. September 18, 2021 has approved plan to augment towel manufacturing capacity by ~20% i.e., 16,600MTPA at Anjar from 85,400 MTPA to 102,000MTPA to meet the growing demand from the overseas customers. Keeping in view the recent trend of customers focus to track the entire value chain i.e., "Farm to Shelf", the Board has approved an investment in 40 looms for towel fabric at Anjar which represents ~7% of installed capacity. At Vapi, Rugs capacity expansion by 80%, which commenced during the last financial year, the Board has approved additional investment relating to automation for faster production turnaround at lower cost. The Company is expected to invest ~Rs. 6,565 mn for the aforesaid expansion over FY22 and FY23. The benefits of these expansions will start accruing in phases from Q1FY23 onwards. This expansion has revenue potential of ~Rs. 12,070 mn from second year of operation.

The Board of the wholly owned subsidiary Company viz., Welspun Flooring Limited, at its meeting held today i.e. September 18, 2021, has approved capex of ~ Rs. 1,436 mn to be invested over FY22 and FY23, for de-bottlenecking and rebalancing of its facility at Telangana, including setting up of a 25MW Renewable Energy Power Plant for uninterrupted power supply at lower cost and to further the Group's commitment towards ESG by embedding sustainability and circularity at every stage of its value chain.

Capex:

During current financial year, the Company has invested Rs. 2,810 mn in capex and the total investment during FY22 will be Rs. 7,500 mn including the investment approved by the Board today for the Home Textile and Flooring Businesses. There is no change in the Company's guidance for the current financial year for Net Debt position i.e., Rs. 24,000 mn as on March 31, 2022.

Shares of Welspun India Ltd was last trading in BSE at Rs. 131.7 as compared to the previous close of Rs. 133.95. The total number of shares traded during the day was 209486 in over 3941 trades.

The stock hit an intraday high of Rs. 135.75 and intraday low of 130.5. The net turnover during the day was Rs. 27762452.

Source : Equity Bulls

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