Welspun India Shares Jump 20% as Investors Cheer Buyback Plan, Strong Q4 Results

Welspun India shares jumped 20% on the positive news.

Shares of Welspun India hit a 52-week high of Rs 104.90 in intraday trade on Tuesday, up 20% in the BSE index, boosted by heavy trading. Last week, the company’s board approved the buyback proposal at Rs 120 per share through a tender offer.

The stock surpassed the previous high of Rs 89.95 on April 28, 2023. The stock was quoted 15% higher at Rs 100.80 at 2:07 pm, while the S&P BSE Sensex gained 0.48%. Over-the-counter trading volumes on the NSE and BSE jumped more than 15 times, with 43.56 million shares changing hands.

Welspun India’s board approved a proposal to acquire 16.25 million shares worth Rs 195 crore through a tender offer. The company, which is engaged in home textiles, said it would buy back up to 16.2 million shares at an offer price of Rs 120.

The company fixed May 10, 2023, as the equity registration date to determine the eligibility of shareholders to repurchase equity.

Meanwhile, Welspun India’s consolidated net profit more than doubled to Rs 125.4 crore in the January-March quarter (Q4FY23), compared to Rs 52.2 crore in Q4FY22. Ebitda’s margin improved 361 basis points to 14.6% from 11% a year earlier. However, total revenue fell 2.3% year-on-year to Rs 2,196 crore.

Management stated that FY23 while challenging due to historically high input costs and slowing demand in key global markets, ended positively with all businesses reporting improved performance in Q4FY23.

Management further added that the company’s relentless efforts to innovate through value engineering and cost rationalisation across the board helped deliver the highest Ebitda margin in six quarters in Q4FY23. It added that all emerging businesses, including the flooring business, showed strong results in Q4FY23, up 24%.

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