Ladies and gentlemen, good day, and welcome to Welspun Living Limited Q1 FY25 earnings conference call, hosted by JM Financial. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchtone phone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Ashutosh Somani. Thank you, and over to you, sir.
Yes, thanks, operator, and welcome everyone to the call. I will first thank Welspun Group for giving JM Financial the opportunity to host today's call. I'll hand over the call now to Mr. Salil Bawa, Head Investor Relations, Welspun Group, to introduce the management. Over to you, Salil.
Thank you very much, Ashutosh. Good morning to all of you. On behalf of Welspun Living Limited, I welcome all of you to the company's Q1 FY25 earnings call. Along with me, we have with us today Ms. Dipali Goenka, Managing Director and CEO. I have Mr. Sanjay Gupta, Chief Financial Officer. We hope you have had a chance to review the investor presentation that we filed with the exchanges yesterday. The same is also available on our website. During today's discussion, we may be making references to this presentation. Kindly do take a moment to review the safe harbor statement in the presentation. As usual, we'll start the forum with opening remarks by our leadership team. After that, we'll open the floor for your questions.
Once the call gets over, should you have any further queries that remain unanswered, please feel free to reach out to any one of us. With that, I would now like to hand over the floor to Ms. Dipali Goenka, Managing Director and CEO. Over to you, ma'am.
Thank you, Salil. Good morning, everyone, and thank you for taking the time to join us today for our Q1 FY 2025 analyst call. I would like to share some highlights of operating performance as well as some achievements during the quarter under review, after which Sanjay will share highlights from our financial metrics. We are happy to share that the revenue growth we have witnessed during the last FY 2024 continued in Q1 FY 2025, with our revenues up by 17% Y on Y to reach INR 2,588 crores. All our businesses have contributed to this performance strongly in global markets as well as in India. We continue to have sustained EBITDA, achieving INR 393 crores, clocking 15.2% in Q1, growing at 15% Y on Y.
Hence, we are well on our way to achieve the top line and bottom line guidance we had achieved for FY 25. The growth that we have seen in Q1 revenues could have been more better if the challenges that the global economy is facing in the terms of ship liners and containers availability owing to the Red Sea issues were not there. Similar to the challenges we witnessed during FY 22, 23, we are seeing not only hardening of the container rates to 3x of last financial year, but also in space and timely availability of vessels. With our major distribution presence in U.S., we have been able to ensure minimum disruption in revenues, but delays in FOB shipments due to non-availability of containers, ships have affected revenues of our different businesses to some extent.
At the same time, our long-term relations with liners have seen us in good stead, leading to minimal impact in cost in Q1. We continue to keep a close watch on this dynamic situation to ensure minimum disruption to the business. Core exports. U.S. GDP continued to grow at a decent rate of 2.9% year-over-year. Retail spending is up 2.5% year-over-year in April to June quarter, as customers take advantage of deals and begin to spend more as inflation cools for the third straight month of 3% year-over-year in June, marking the lowest reading since June 2023, bolstering case for sooner than expected Fed rate cuts. Consumers have retained the ability to spend and are driving the solid economics. India continues to be the leading supplier of terry towels and bedsheets to U.S.A.
As per the OTEXA data, India continued to enjoy dominant market share in exports to U.S. for June 2023-May 2024 period, both as terry towels at 44% and in bedsheets at 61% in value terms. India has strengthened its share in bedsheets by 10% and stayed flat in terry towels as compared to last year in the same period. Though the overall exports to U.S. in value terms during this period remained at the same level in terry towels and grew by 5% in bedsheets due to geopolitical issues during quarter one, FY 2025. WLL, however, witnessed a growth of 10% and 40%, respectively, solidifying our leadership in U.S. exports further. Our E.U., U.K., and rest of the world have also shown a double-digit growth.
Exports of home textiles have seen a tremendous growth due to our unwavering commitment in providing unparalleled quality, both in products as well as in services, growing by 19% in quarter one, FY 25, and maintaining a healthy EBITDA of 17%. Innovation is the heart of everything that we do. Our innovation products continue to be the major contributor to the revenues of 30%, growing by 13%. Emerging businesses. Our emerging businesses of domestic consumer business, global brands, advanced textile, and flooring businesses, grew 7% Y on Y in Q1 FY 25, and contributed close to 30% of the total revenue of the company.
Our licensed global brands like Martha Stewart and Disney continue this growth journey, and have given us an edge in U.S. and European markets by opening up additional shelf space with our key retailers, as well as in creating new avenues. Our own global brands, Welhome and Christy, have grown over 10% during the quarter. Domestic retail. India continues to outshine with an expected GDP growth of 7.1% in Q1, vis-à-vis 7.8 in Q4, and inflation hovering around 5% during the quarter. The retail sector demand, however, continued to remain muted during Q1 to April to June 2024, mainly due to lower consumer spending, especially in discretionary categories, which is at the trough of the seasonal cycle. Nevertheless, we showed a lot of resilience despite subdued operating conditions in consumer markets, which continued to subsist in Q1 as well.
Our domestic business remained flat in line with the national retail sales growth and clocked a revenue of INR 123 crore with a muted 3% growth, despite the challenging retail market in the country. In order to navigate through challenging market conditions, we've expanded into new categories, channels, and hopeful to witness increased tertiary offtakes once the demand opens up with the festive season, which is right underway. Welspun brand continued to be the most widely distributed home textile brand in the country, with presence in 500+ towns and 21,154+ outlets, up by 972 in quarter one. A reach not hitherto achieved by any home textile player in India.
Brand recall for Spaces and Welspun has jumped substantially to 80% from 72% and 50% from 40% respectively for our target audience, thereby leading in premium and mass home textile category. Brand Welspun growth has witnessed a healthy 12% Y on Y growth in Q1. Brand Spaces has outgrown category in the modern trade channel, emerging as a leading brand within the category and gaining the market share. The home textile consumer business continued investment in marketing to the tune of 10%. We remain committed to continued investment in our brands for improving the brand visibility and salience, as well as a focus to build profitable business growth in the domestic consumer business. Flooring.
Our flooring business continued to perform well, recording a revenue of INR 228 crore, flat Y on Y, with dispatches in Q1 impacted to some extent due to Red Sea issues. With increase in capacity utilization to 64%, EBITDA margin of the business has improved to 9%. We have added a big ticket customer in U.S.A. for wall-to-wall carpets and carpet tiles, and have strengthened our position in Middle East and ANZ. Similarly, we are getting great traction from large retailers and big ticket distributors in U.S. and U.K. in hard flooring, and thus look forward to a good start in flooring in Q1 FY 2025. On domestic market front, we continue to see growth in hospitality and commercial segments in all our key markets in India. Domestic flooring revenue grew by 15% Y- on- Y.
In order to capitalize on the market opportunities, we continue our work on making inputs and entire value chain more and more integrated. The advanced textile business witnessed a 26% growth Y-on-Y in Q1 FY25, with a revenue of INR 132 crore. Capacity utilization of our new Telangana Spunlace facility has reached 63%. Our Spunlace sales have continued to be strong in all our key global markets, forging new partnerships in U.S., Europe, and India, with our innovative and sustainable nonwovens. ESG is embedded in every aspect of operations at Welspun, keeping us ahead of our peers globally in sustainable practices.
We are well on our journey towards achieving 100% RE by 2030, and in this regard, the board has approved setting up of 18-megawatt solar plant at Vapi, which could meet about 30% of the power requirement at Vapi. We are also happy to announce that Welspun is now part of the World Economic Forum's Alliance of CEO Climate Leaders, India, which is a high-level platform for business leaders to support concrete plans and ideas to step up India's climate action and green transition efforts. In addition to that, Welspun also joined the Reuters Vision 2045 campaign to drive sustainable change by making India the sustainable loom for the world. While the global economy exhibits mixed sentiments, the positive signs of cooling inflation and expected rate cuts in the U.S. are encouraging.
Acknowledging the potential volatility from geopolitical issues, the Red Sea situation, and elections in various regions, we stay alert and proactive. Our strategy focuses on navigating these challenges and seizing opportunities effectively. With this, I would now like to hand over to Sanjay, who will take you through the financial highlights.
Thank you, Dipali. And greetings, everyone. I'll give a brief overview of the financial numbers for Quarter One, Financial Year 2025, before we open for question and answer. During Quarter One, Financial 2025, we reported revenue of INR 2,588 crore, up 17% year-on-year, and which remains in the same level as quarter-on-quarter. EBITDA margin for the Quarter One stood at INR 393 crore, that is 15.2%, growing by 15% year-on-year. Profit after tax, after minority interest for the quarter is at INR 186 crore, vis-a-vis INR 162 crore year-on-year, growing by 15% year-on-year and 27% quarter-on-quarter. Consequently, our consolidated EPS for Quarter One 2025 stood at INR 1.93 per share, as compared to INR 1.66 per share in Quarter One of Financial Year 2024.
On the Forex front, our average exchange realization for U.S. dollar during Quarter One was 84.05, compared to 82.16 in the corresponding quarter last year. Net debt stood at INR 1,562 crore, versus INR 1,815 crore as on June 2023, which is lower by INR 253 crore, and versus INR 1,354 crore as of March 2024, increased by INR 208 crore due to CapEx spending and increased investment in working capital during Quarter One. The interest cost, hence, is also due to the higher borrowing for working capital, and because RBI's repo rate has remained unchanged in last 3, 4 quarters. It has slightly gone up by INR 243 crore from INR 26 crore year-on-year. However, with reduction in working capital in ensuing quarter, this cost is expected to come down.
Coming to segmental results, Quarter One of Financial 2025, core business Home Textile revenue stood at INR 2,387 crore, versus INR 2,028 crore in Quarter One 2024, up by 17% year-on-year. Quarter One EBITDA of Home Textile stood at INR 342 crore, at 14.7% as compared to 15.3% year-on-year. During Quarter One 2025, revenue from flooring business was INR 228 crore, up by 1%. EBITDA is at INR 21 crore, which is 9.2% as compared to 8.1% year-on-year. In Quarter One 2025, we spent INR 206 crore towards CapEx, majorly towards towel project at Anjar and pillow project in the U.S.
The Board of Directors have, in its meeting held yesterday, approved buyback of equity shares of the company for an amount of up to INR 278 crore at a price of INR 220 per share. The promoters will be tendering 100% of their eligibility under the buyback. Apart from this, the board has had also approved dividend of 10% in financial year 2024, in Quarter Four of 2024 meeting. The company's outflow for the buyback and dividend hence would be totaling to INR 353 crore, which includes the tax outflow, in this.
Over the last four years, hence, the company has distributed 40% of its free cash flow on an average to the shareholder, with cumulative INR 880 crore distribution out of free cash flow generation of INR 2,200-odd crore during the same period. Financial year 2024, total distribution also works out to 81% of our free cash flow. During the same period, we have continued reduction in the net debt from INR 2,333 crore in financial year 2021 to INR 1,354 crore by the end of financial year 2024. With this, I will now leave the floor open for question- and- answer. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rajiv from JM Financial. Please go ahead. Hello, Mr. Rajiv, your line has been unmuted. Please go ahead with your question.
Rajiv? Rajiv?
Hello.
Yes.
Yeah. Am I audible?
Yes, Rajiv.
Yeah, Dipali, if you could give some color on the order book, demand retail growth in the U.S. markets. How is our second half of 2025 shaping out to be? Do we see a sharp recovery in the second half demand? W hat sort of revenue growth is possible in FY 25, given your current assessment?
You know, I think, for us, the demand remains good as it is right now, as you've seen in quarter one. We see a good visibility, because you know that, you know, United States gets ready for the holiday season, and that's been the trend. So we definitely see that demand being at a steady state here, Rajiv. And when you talk about our growth, we have given a commitment of around 12% growth, and we remain cautiously optimistic about it, and we will top it up as we go forward, as we have done in the quarter one as well.
Okay. Yeah, thank you.
Thank you. Thank you, Rajiv.
Yeah.
Thank you. The next question is from the line of Biplab Debbarma from Antique Stock Broking. Please go ahead.
Good morning, everyone. So my first question is on the growth, 15%, 15% year-on-year growth. So, ma'am, which segments contributed to this 15% growth? And is it high because of volume or price growth, or what is the contribution of volume growth in this? Yes, thank you.
Hi, Biplab. It has primarily been the sales, and it has also been an impact of the exports primarily. As you have seen that the emerging markets have been a little subdued competitively as well. So while we see the exports growing at a rate of 17%, and that's what has actually contributed to it, our emerging businesses actually were a little subdued. Also, because if you look at flooring, you know, with the kind of 64%, you know, at the factory, it is running at, you know, capacity, our, you know, we could have done better if the Red Sea issues would have been a little more, you know, not that challenging. So, you know, it has been a mix here.
When you talk about the margins, I think I would say that the exports have contributed to the margins as well, primarily.
So, the growth has mainly come from volumes, as you had asked, so price, there has not been many, any change, or major change, so the growth is basically volume growth.
Oh, great. So, second question is I missed that funding part. Sir, how you are funding the distribution of the cash outflow for distribution of dividend and buyback?
So this is.
From internal.
Yeah, internal resources. So we have earned free cash flows earlier and which is available with the company, and it will be paid out of that.
Okay. Sir, since you have that, and it is also grow this quarter, I think that has grown a bit. And so, I'm just wondering, could we not have used the money of that repayment, or this is how the capital structure you want to be?
Y ou know, our capital allocation requires that we pay off to our shareholder as well, some percentage of our profit, and hence, which have, we have been doing for year- on -year, so that we have done. Despite that, as I was telling you in my speech, that we have been reducing our net debt from INR 2,300 odd crore to INR 1,300 odd crore, and this year, despite all these payments, we would be in the same ballpark range of roughly 24 net debt. So, net debt is not an issue.
Okay. Okay. And my final question, with quarter one seeing strong growth and outlook on exports looking positive, shall we maintain the same guidance on the top line and that, or do you like to change our guidance?
So, as Dipali mentioned, we are cautiously optimistic because we have seen the, we have seen the Red Sea issues and other economic issues which is gripping the world. However, as we had maintained, we will, we will top the 12% growth that we have already guided towards, and we will meet our bottom line guidance of EBITDA 15%-15.5%, as we have guided towards.
Okay, sir. Thank you, sir. I will come back in the queue.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Anushka Chitnis from Arihant Capital Markets Ltd. Please go ahead.
Hi, thank you for the opportunity. My question is about the related to the buyback. I wanted to know if the promoter entity will be participating in this?
Yes, as we mentioned in our speech, yes, the promoter entity will be participating 100% in this.
Okay, thank you.
Thank you. The next question is from the line of Prerna Jhunjhunwala from Elara Capital. Please go ahead.
Hi. Congratulations on strong set of numbers. Ma'am, I wanted to understand more on flooring. Why Red Sea is impacting that segment more than other categories, which are also export driven?
So, it's a little different here, Prerna, and you must, I mean, you know, when we talk about home textiles, it's mainly primarily FOB.
Here you have CIF, and you also have the DDP shipments, and hence the challenges were there, you know. And where we actually got challenged to get the, you know, the containers, in, for the flooring, Prerna.
Oh, okay.
Yeah.
Ma'am, how would be the volume versus price growth in this segment, in this 1% growth? Because utilization levels have improved, so just wanted to understand whether there is some price correction or is it inventory lying in the system?
Yeah. Hi, Prerna.
Hi.
So, as I mentioned, more or less, this is volume growth. However, there have been some mixed change, as compared to, you know, hard and soft breakup. So, hence, that small impact might have come, but mainly it is volume growth. And volume, though we have manufactured during the quarter at 64% utilization, we have not been able to ship it because of the issues that we are facing for blank sailing and containers not being available. You will see those impact in the current quarter when we will ship it, hence, there is no price erosion.
What kind of growth can we expect in flooring business in this year, given the visibility on demand that we have today?
We had given a guidance of about 20%-25% growth in flooring for this year, and which we will achieve.
Prerna, we will, you know, we'll achieve that. In fact, if you've seen the domestic flooring also, it has grown 15% year-on-year, and we definitely are on that trajectory.
Okay.
Okay.
The demand scenario remains decent. I mean, there's no challenge over there.
No.
That well? Okay.
Not at all.
Oh, great. Great, ma'am. Ma'am, what I just HT. In HT, the e-commerce segment has seen a significant degrowth. Or what would be the reason behind it, and what is not included? I mean, I'm just trying to understand HT e-commerce and HT brands, how do you bifurcate also between the two?
So I think they're very different. One thing is that when you talk about a Global Online, it is primarily we talk about omni-channel. And omni-channel, you know, it is quite sometimes gets seasonal, but I think we are on the. We basically are on track because the retailers buy it, and then they sell it, you know? And while we do that, I think I must tell Prerna, you must go on Spaces.in and see, because that's our brand.com.
Okay.
Christy.co.uk to see our brand.com sites. And you should see, because if you look at Christy, they are growing at a rate of around 20%. Spaces is also on that path, and do give us a feedback. Omni-channel is something, is a behavior of the customers. And, you know, it is a little seasonal. As you know, it is summertime, people are far more, you know, outside, rather than, you know, buying, online more, right?
Yeah.
And it's more so discretionary needs and experience, so people are basically, you know, buying offline, and that's that has been the kind of thing that-
So Prerna, yeah. Prerna, the difference that you see in quarter one of last year and quarter one of this year is mainly, as Dipali said, is our sales to the omni-channels. And omni-channels, you know, they, they buy more in some quarter, they buy less in some quarter. But overall, our growth will be there in this sector. But this quarter we have seen a dip, because in the last year, same quarter, some high purchase was done by the omni-channels together, which will now spread to maybe quarter two or quarter three.
Okay. So it is because of the base effect, and nothing to worry about it, okay.
Nothing.
No, nothing at all.
Okay. Because you saw Amazon sales, I mean, they are, they are going through the roof, so I thought, what, what is leading to this e-commerce too?
Sales from those omni-channels are happening as it is happening, so there is no. It's the stock built up, which happened, so there, there was a smaller stock built up. You know, some stock we could not send because of the Red Sea issue. So, you know, all these issues in stocking are right now taking place, so you shouldn't read so much into it. It's-- You should give some time, for more quarters to see the real growth coming.
Perfect, sir. No problem. My last question is on margins. Given the correction in raw material prices and challenges on, maybe, freight front, what is the guidance that you are giving for home textiles and flooring separately?
So Prerna, as we said, we are keeping a close watch in this situation. We have, you know, contracts with the liner. So we are. We will not allow our costs to go overboard in this. The only challenge could be, you know, timely sending the goods
Yeah
Ready availability of the goods. W e don't see any impact on the cost side coming in a major way, because of this. Might be, you know, 0.2, 0.3 here or there, but not much.
Oh, that's not, that's not major at all. Okay.
Yeah.
Great. Yeah, great, ma'am. And last on expansion, status, is it on schedule or,
Yeah.
Yeah. We had said that we will start both the plants in quarter three, somewhere, sometime. End of quarter two.
End of quarter two.
Quarter three, we will do that.
Yeah.
Oh, great. All the best. Thank you.
Thank you, Prerna.
. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. To ask a question, you may press star and one. The next question is from the line of Biplav Debbarma from Antique Stock Broking. Please go ahead.
Thank you. So I have just one question on the margin side, sir. With we seeing a volume growth contributing our growth and assuming that there is no further disruption in supply chain, what kind of EBITDA margin do we expect in FY 25?
So, Biplab, we had guided towards 15%-15.5% EBITDA during this year.
Yes.
For the consolidated business, so we will stick to that.
Okay. So, that means since quarter one is around 13.5, so we'll see a margin expansion if everything remains the same, right, sir?
Without the other income.
Yeah.
I'm talking about with the other income, the total EBITDA for the company should be in the range of 15%.
Okay. Okay. Okay, okay. Thank you, sir. Thank you, sir. All the best, sir.
Yeah.
Thank you. A reminder to all participants that you may press star and one to ask a question. The next question is from the line of Bhavin Chheda from Enam Holdings. Please go ahead.
Yeah, good morning, and congrats on excellent growth across both the businesses. If I see your presentation, your bath linen utilization almost has reached 94%. So, what would be the optimum utilization or debottlenecking from the existing 90,000 tons? And secondly, I think you also announced 6,400 tons of Jacquard towel expansion. So how much time that would take to ramp it up to 100%, since the demand looks very strong in U.S. market in this category?
No, I think, you know, I just will add up here, is that, you know, our optimum levels are where we are today. But going forward, having said that, you know, with the Jacquard facility coming in, which is right underway by August end in September, you know, we'll be up and running on that. That actually will help us to, you know, leverage the mix that we have. And it is also very seasonal as well. So, you know, the mixes keep on changing here. So definitely we will see a mix, and we are absolutely on track on that. With Jacquard, it will help us to leverage our capacity. And also, as we go forward, debottlenecking is something that we definitely look at.
Our ancillaries are also there, which help us to which contribute to substitute when the demand comes in.
Sure. Second on, flooring business is ramping up well, both on top line across markets and margins are improving. So what kind of optimum margins, at what capacity utilization, you're looking? You're already reached 9%. I believe at optimum level, it would be 15, 16% or so. When, when can we see that kind of operating margin in flooring business?
Hi, Bhavin. So
Hi, Sanjay.
Hi. Hi. So we have a plan of growth of flooring at about 20%+ CAGR over the next 3-4 years, which would take us to a capacity utilization in excess of 80% by financial year 2027. Once we reach 80%+ capacity utilization, we should hope to reach an EBITDA of about 15%-16%, which is.
At 80% utilization?
Yeah, at 80%.
Sure. And on slide 12, when we are saying annual capacity installed and annual capacity effective, you're calculating utilization on effective capacity. What that means?
So we have built the plant for total capacity of 27, while we have fitted the plant with machinery for 18 million square meters. We will need to spend some balancing CapEx to make it from 18 to 27 when required.
Yeah.
Unless we reach a capacity utilization of 18, we will not spend in, you know, putting additional capacity.
Sure, sure. And last one, if I missed out on what's the CapEx outgo in FY 25 and possibly FY 26, if some projects are going in into 26?
We have given a guidance for 2025 for INR 860 crore of CapEx, which includes Anjar towel, then pillow in U.S., and then INR 75 crore for our transmission line for the renewable energy, plus balance maintenance CapEx. For 2026, we have not yet given the guidance, but we can expect to see 3,300 to 400 crore of CapEx in next year as well.
Yeah. Thank you, and best of luck. Yeah, yeah.
Thank you.
Thank you. The next question is from the line of Resham Jain from DSP Asset Managers. Please go ahead.
Hey, yeah. Good morning.
J ust on the demand front, when we look at some of the commentary of the retailers in U.S., the outlook is quite mixed. And in general, we have not seen any material kind of improvement in terms of the retail demand in U.S. So from your perspective, how are you looking at U.S.? What will be your strategy, let's say, in the current situation? If you can just give your thoughts around it, that would be very helpful.
In fact, hi, Resham. I'll just give you a perspective here. Walmart, if you look at their commentary, they are giving a positive outlook there. And even Target, they have actually changed their perspective on it. The clubs continue to do well, if you look at their results as well. And departmental stores were the challenges that we saw, but if you look at a few, they are turning around as well. The discounters continue to be strong. So I can just say that, you know, while you, we- we've been hearing about mixed, you know, perspective, but I think with America, we are very, very positive about the growth that we see, coming in. Because I think America prepares for the holiday season, by quarter three. So, we, we are good right now as we see, the demand.
Okay. And the second question is, with respect to all the three verticals within the home textile. Can you share your outlook, not numbers, but which segment between bedsheet, towels, and carpets and rugs will grow faster than the other one? If you can just give your thoughts.
I think it's a mixed bag. Right, you know, right now, like, if you saw, like, you know, the Terry towels, you know, the growth was 10%. Sheets was around 40% this quarter. Rugs also continue to grow at a steady state. It's a mix, actually, Resham. You know, we, we will not be able to tell you where it is, but I think we'll have a steady mix of whatever we have committed as a top line and, you know, and the growth.
Understood. The last question is from the Indian manufacturer's perspective, how do you see the competitive landscape emerging? Again, over the last 3-4 years, there has been a lot of shifts, not shifts, but the dynamics have little bit changed. And hence, if I look at your, let's say, 3 years back guidance, it used to be 20%-22% kind of range, used to be the normalized margin, which has come down obviously now in the current dynamics. But generally, from the manufacturing landscape perspective within India, how do you see the situation?
Yeah, hi, Resham. So we have discussed about it in earlier forums. You know, when we are talking about 20%-22% margin, we are also talking about cotton rates, which were at INR 40,000-INR 45,000. Now, since cotton rate has now come to a new normal of INR 60,000-INR 65,000, you know, you cannot have the same amount, same level of margin because, you know, end consumer doesn't want to pay price above a certain limit. And hence, you know, the normal average margins have come down to 15, 16% level. But still, in export business, as we had mentioned, we are getting a 17%-18% margin, which is healthy margin for us.
As our emerging businesses of flooring, advanced textile, domestic business starts to gain momentum in not only in sales but also in profits, we should see a range of 16%-18% EBITDA for the company as a whole in the next, you know, couple of years.
Okay, understood. That's helpful. Wish you all the best. Thank you.
Thank you. The next question is from the line of Shraddha from Asian Market Securities. Please go ahead.
Yeah, hi. Congrats on a good quarter. A couple of questions. First is, why did the utilization of the bed linens come down from 79% to 69%? Sorry, I logged in late to the call, so I'm not sure if it's answered this.
Yeah, it is actually a matter of just operations. But we are, as we saw, that the sheets are around 40%. And you know, when we talk about it's a mix of, you know, fashion bedding and the others, so you would have seen this. But as we go forward, I mean, I think we'll be at around 84%.
Right. And on the Jacquard and Terry towels, so how should the realization differ for both these product mixes? So what should the realization be for Jacquard towel, just a broad ballpark range?
Generally, it would be slightly higher because, you know, Jacquard towels, the cost is higher in making it. So 10%-15% difference is there in the Jacquard towel would be better than the normal towel.
Asset turn would be how much in this capacity?
One is to one.
One is to one, right. And so secondly, how should we look at the power cost, given the kind of initiatives we are taking on the new incremental green energy side? So how should the power cost come down as a percentage of revenue?
Yes, yes. So slowly and slowly, as we build up our renewable energy capacity, we should get towards a power cost coming to half of what we have now.
Yeah. It will be the most competitive power cost that we'll have because of this as well.
We should see it coming from the year 2026, 2027, fully.
So that itself should give us, you know, good leeway on the margin front, so we can look at margin improvement of 200 basis points plus over the next two years?
As I said, yes, we can,
Yeah.
Right. Right. Sure. This is helpful. Thank you, and all the best.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to the management for the closing comments.
Through stellar performance in all our businesses, core as well as emerging, we have been able to grow at 17% Y on Y in Q1, and confident to achieve our guidance for FY 2025, as shared earlier. The exceptional growth we have achieved across our businesses in FY 2024 is a testament to unwavering commitment to provide to our customers unparalleled, innovative and patented products, actionable insights and solutions driven by our investments in technology and digitization, which truly position us as the FMCG of textiles. We continue to have greater focus on the India market, which is shining star in the current global economic scenario, with deeper penetration in retail segment to increase EBOs, MBOs and higher brand visibility, and hence reinstating that] Domestic flooring is reaching newer heights, and overall flooring businesses have continued its profitable growth during the quarter.
Simultaneously, ESG remains a cornerstone at Welspun, and our commitment to sustainable and responsible business practices continues unabated through increasing investments in green energy initiatives. We are committed towards our future growth targets for all our businesses, and with sustained growth profitably, we would continue to achieve higher ROCE and ROE, thereby creating substantial value for investors and stakeholders. Thank you for your continued interest in Welspun Living. For any further queries, please feel free to connect with Salil and Sanjay.
On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.