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Welspun India’s Q2 margins take a hit due to a falling rupee

Welspun India’s Q2 margins have been impacted by almost three per cent due to the depreciating rupee against the dollar. The textile firm has taken a hit by around Rs 37 crores due to currency fluctuation and expects margins will continue to shrink by an almost similar figure over the next few quarters.

While the exchange rate has had its impact, the company had various other one-off expenses that added pressure on the business. Welspun reported a 18.7 per cent on-year growth in profit after tax at Rs 114.8 crores for the July-September quarter of this fiscal. The textile firm sees positive growth momentum in volumes and is confident of achieving its annual guidance for revenues and profits. Welspun continues to pursue its differentiation strategy based on branding, innovation, sustainability and its patented traceability solution.

The company is seeing substantial growth in e-commerce and has developed a few products for the online marketplace as well. Capacity utilisation has gone up from 80 per cent clocked in the previous financial year. The plan is to invest Rs 900 crores as a part of capital expenditure. Capital has been set aside for a new flooring unit in Telangana.