WELSPUN Ltd.

General Overview
Welspun Group is one of India’s fastest growing global conglomerates with businesses in
Line Pipes, Home Textiles, Infrastructure, Steel, Advanced Textiles and Flooring solutions.
As globally recognized leaders in Home Textiles and Line Pipes, we have presence in over 50
countries with a strong team of 26,000+ employees.

At Welspun, we strongly believe in our purpose to delight customers through innovation and
technology, achieve inclusive and sustainable growth to remain eminent in all our businesses.
From Homes to Highways, Hi-tech to Heavy metals, we lead tomorrow together to create a
smarter and a more sustainable world.

Management Team
Name Designation
Balkrishan Goenka Chairman
Dipali Goenka Joint Managing Director & CEO
Arvind Kumar Singhal Independent Director
Anisha Motwani Independent Director
Anisha Motwani Independent Director

Rajesh Mandawewala Managing Director

Arun Todarwal Independent Director
Pradeep Poddar Independent Director
Shalil Mukund Awale Nominee Director

Family Operated or Professionally

B K Goenka (born 15 August 1966) is an entrepreneur based in Mumbai, Maharashtra, India.
He is the Chairman of Mumbai-based ₹153 billion (US$2.2 billion) Welspun Group. He is
the Co-promoter and largest shareholder in companies like Welspun India Ltd, which is one
of the largest home textiles producer in the world and Welspun Corp Ltd, which is world's
second largest manufacturer of large diameter pipes.
 SWOT Analysis of Welspun
STRENGTHS OF WELSPUN

- Diverse Revenue models - Over the years Welspun has ventured into various
businesses outside the Consumer/Non-Cyclical sector. This has enabled the
company do develop a diversified revenue stream beyond Consumer/Non-Cyclical
sector and Personal & Household Prods. segment.

- Market Leadership Position - Welspun has a strong market leadership position in

the Personal & Household Prods. industry. It has helped the company to rapidly
scale new products successes.

- Track record of innovation - Even though most players in the Consumer/Non-

Cyclical strive to innovate, Welspun has successful record at consumer driven
innovation.

- Talent management at Welspun and skill development of the employees - Human

resources are integral to the success of Welspun in Personal & Household Prods.
industry.

- Success of new product mix - Welspun provides exhaustive product mix options
to its customers. It helps the company in catering to various customers segments in
the Personal & Household Prods. industry.

- First mover advantage in the increasingly crowded market place. The new
products are rapidly increasing Welspun market share in the Personal & Household
Prods. industry.

WEAKNESSES OF WELSPUN

- Low investments into Welspun's customer oriented services - This can lead to
competitors gaining advantage in near future. Welspun needs to increase investment
into research and development especially in customer services oriented applications.

- Niche markets and local monopolies that company’s like Welspun able to exploit
are fast disappearing. The customer network that Welspun has promoted is proving
less and less effective.
- High cost of replacing existing experts within the Welspun. Few employees are
responsible for the Welspun's knowledge base and replacing them will be extremely
difficult in the present conditions.

- Gross Margins and Operating Margins which could be improved and going
forward may put pressure on the Welspun financial statement.

- Business Model of Welspun can be easily imitated by the competitors in the

industryname industry. To overcome these challenges companyname needs to build
a platform model that can integrate suppliers, vendors and end users.

- Extra cost of building new supply chain and logistics network - Internet and
Artificial Intelligence has significantly altered the business model in the
Consumer/Non-Cyclical industry and given the decreasing significance of the dealer
network Welspun has to build a new robust supply chain network. That can be
extremely expensive.

OPPORTUNITIES FOR WELSPUN

- Accelerated technological innovations and advances are improving industrial

productivity, allowing suppliers to manufacture vast array of products and services.
This can help Welspun to significantly venture into adjacent products.

- Rapid Expansion of Economy As the US economy is improving faster than any

other developed economy, it will provide Welspun an opportunity to expand into the
US market. Welspun already have know-how to operate into the competitive US
market.

- Trend of customers migrating to higher end products - It represents great

opportunity for Welspun, as the firm has strong brand recognition in the premium
segment, customers have experience with excellent customer services provided by
Welspun brands in the lower segment. It can be a win-win for the company and
provides an opportunity to increase the profitability.

- Lower inflation rate - The low inflation rate bring more stability in the market,
enable credit at lower interest rate to the customers of Welspun. This will increase
the consumption of Welspun products.
- Increasing customer base in lower segments - As customers have to migrate
from un-organized operators in the Consumer/Non-Cyclical industry to licensed
players. It will provide Welspun an opportunity to penetrate entry level market with a
no-frill offering.

- Customer preferences are fast changing - Driven by rising disposable incomes,

easy access to information, and fast adoption of technological products, customers
today are more willing to experiment / try new products in the market. Welspun has
to carefully monitor not only wider trends within the Personal & Household Prods.
industry but also in the wider Consumer/Non-Cyclical sector.

THEATS TO WELSPUN

- Commoditization of the product segment - The biggest challenge for Welspun

and other players in the industry is the increasing commoditization of the products in
Consumer/Non-Cyclical industry.

- Growing technological expertise of local players in the export market - One of

the biggest threat of tie-up with the local players in the export market for Welspun is
threat of losing IPR. The intellectual property rights framework is not very strong in
emerging markets especially in China.

- Shortage of skilled human resources - Given the high turnover of employees

and increasing dependence on innovative solution, companyname can face skilled
human resources challenges in the near future.

- Changing demographics - As the babyboomers are retiring and new generation

finding hard to replace their purchasing power. This can lead to higher profits in the
short run for Welspun but reducing margins over the long run as young people are
less brand loyal and more open to experimentation.

- Competitive pressures - As the new product launch cycles are reducing in the
Consumer/Non-Cyclical industry. It has put additional competitive pressures on
players such as Welspun. Given the large customer base, Welspun can't respond
quickly to the needs of the niche markets that disruptors are focusing on.
 Competitor Analysis

Welspun vs Trident group

Welspun India is Asia's largest and world's fifth largest manufacturer of terry towels
(accounted for 79% of FY06 revenues). A wide product range, fully integrated
capacities and the ability to offer value added products make the company a
preferred supplier to major retailers in the EU and the US. Welspun also has
marketing licences for the 'Nautica' and 'Tommy Hilfiger' brands and owns the
'Spaces' brand in India. The company's foray into bed linen is a step towards
positioning itself as a single-point vendor in home textiles. It is a flagship company of
the Welspun Group, with promoters holding 34% stake. In 1QFY07, Welspun India
bought 85% stake in CHT Holdings Limited, the holding company of UK's leading
towel brand Christy.

TRIDEN WELSPU TRIDENT/

T N INDIA WELSPUN
Mar-18 Mar-18 INDIA
High Rs 110 100 109.9%
Low Rs 59 58 102.4%
Sales per share
Rs 91.5 602.2 15.2%
(Unadj.)
Earnings per
Rs 5.3 39.6 13.4%
share (Unadj.)
Cash flow per
Rs 13.4 89.8 14.9%
share (Unadj.)
Dividends per
Rs 1.50 0.65 230.8%
share (Unadj.)
Dividend yield
% 1.8 0.8 215.3%
(eoy)
Book value per
Rs 59.1 269.3 21.9%
share (Unadj.)
Shares
m 497.83 100.47 495.5%
outstanding (eoy)
Bonus/Rights/Con
- - -
versions
Price / Sales ratio x 0.9 0.1 705.1%
Avg P/E ratio x 15.9 2.0 801.0%
P/CF ratio (eoy) x 6.3 0.9 717.3%
Price / Book Value
x 1.4 0.3 488.6%
ratio
Dividend payout % 28.3 1.6 1,724.5%
Avg Mkt Cap Rs m 41,942 7,897 531.1%
No. of employees `000 12.6 20.6 61.0%
Total
Rs m 5,244 6,754 77.6%
wages/salary
Avg.
Rs Th 3,623.1 2,931.8 123.6%
sales/employee
Avg.
Rs Th 416.8 327.3 127.4%
wages/employee
Avg. net
Rs Th 209.9 192.9 108.8%
profit/employee
 Conclusion and Future of the Company
Investors in search for stocks with room to flourish should look no further than
WELSPUNIND, with its expected earinngs growth of 27%, made up of high-quality,
operational cash from its core business, which is expected to increase by 77% next
year. This indicates a high-quality bottom-line expansion, as opposed to those driven
by unsustainable cost-cutting activities. WELSPUNIND’s strong financial health
means that all of its upcoming liability payments are able to be met by its current
cash and short-term investment holdings. This indicates that WELSPUNIND has
sufficient cash flows and proper cash management in place, which is a crucial insight
into the health of the company. Debt funding requires timely payments on interest
to lenders. WELSPUNIND’s earnings sufficiently covered its interest in the prior year,
which indicates there’s low risk associated with the company not being able to meet
these key expenses.

Next Steps:

For Welspun India, there are three relevant aspects you should further research:

1. Historical Performance: What has WELSPUNIND’s returns been like over

the past?
2. Valuation: What is WELSPUNIND worth today?
3. Other Attractive Alternatives : Are there other well-rounded stocks you

could be holding instead of WELSPUNIND?

There is bright future of this company if it continues to perform well.