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WELSPUNIND | Welspun India Buyback Approved | Complete Stock Analysis | Big Boom On It's Way


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Welspun India Limited - WELSPUNIND

Introduction


Welspun India Limited started with Welspun Winilon Mills in the district of Palghar, Maharashtra in 1985. They were a small texturizing unit in a small, sleepy town between Mumbai and Gujarat. Six years down the line, in 1991, Welspun Polyester India Limited went public with its IPO and subsequently became Welspun India Limited. They started small but grew at an extraordinary pace. In 1993, the terry towel facility was set up in Vapi, Gujarat. Legend has it that no one could believe such high-end towels could be made outside of Turkey. In 2000, Welspun USA was incorporated as a wholly-owned subsidiary of Welspun Global Brands Limited. With sales, design, and marketing based in NYC and a distribution centre in Ohio, Welspun focused on getting to know its US consumers better.

Welspun India Ltd is Asia `s largest and amongst the top 4 Terry Towel producers in the World.


The product range of the company includes

  • Bath – Embroidered Towels - Sublistatic - Stripes - Bathrobe

  • Bed – Bed Linen

  • Rug – Embroidered Towels – Sublistatic - Stripes

  • Top of Bed – Embroidered Towels – Sublistatic


Part 1 – Fundamental Analysis


Quarterly Overview


Strengths and Weaknesses Bases On Yearly Performance


Strengths


Weaknesses


Opportunities for Textile Sector


India’s textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries.


The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital-intensive sophisticated mills sector on the other end. The decentralised power looms/ hosiery and knitting sector forms the largest component in the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. India’s textiles industry has a capacity to produce wide variety of products suitable for different market segments, both within India and across the world.


India’s textiles industry contributed 7% to the industry output (by value) in 2018-19. The Indian textiles and apparel industry contributed 2% to the GDP, 12% to export earnings and held 5% of the global trade in textiles and apparel in 2018-19.


Textiles industry has around 4.5 crore employed workers including 35.22 lakh handloom workers across the country.


Cotton production is expected to reach 36.0 million bales and consumption is expected to reach 114 million bales in FY21—13% growth over the previous year.


The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 3.68 billion from April 2000 to December 2020.


The future for the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market.


High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market.


Key Positions Based On Yearly Results


Management

  • Chairman

Balkrishan Goenka, serves as the Chairman of Welspun India Limited.

  • Managing Director

Rajesh Mandawewala, serving as the Managing Director of the company.

  • Joint Managing Director & CEO

Dipali Goenka, leads the position of Joint Managing Director and CEO for Welspun.


Shareholding Pattern as on 31st December, 2020

Welspun India Limited Shareholding Pattern
Welspun India Limited - Shareholding Pattern

Returns on Share


52 Week Higher Level: 104.40 INR


52 Week Lower Level: 23.80 INR


Peers


Page Industries, KPR Mill, Alok Industries, Trident, etc.


Part 2 – Technical Analysis


Welspun India Technical Analysis | Welspun India Complete Stock Analysis
Welspun India Daily Chart

The above image shows the Daily chart of MOREPENLAB along with 5, 13 and 26 Days Exponential Moving Averages (EMA), Moving Averages Convergence-Divergence (MACD), Relative Strength Index (RSI), Bollinger Bands (BB) and Volume.


After forming a squeeze of almost 2 months in Bollinger Bands, the stock tried to give a breakout at 84 level, unfortunately it turned out to be false one and a down move seen in straight 3 days.


Since 84 level, the stock is moving with upper Bollinger Band and its above zone, as of 17th May, 2021 a sharp correction is being seen for the same.


Currently, 104 and 84 levels are acting as resistance and support levels for the stock.


Indicators


1. 5, 13 and 26 Days Exponential Moving Averages (EMA)

On 3rd May, 2021 5 DEMA cut the 13 & 26 DEMA from below giving a buy signal and as of 17th May, 2021 it is still above 13 & 26 DEMA.


2. Moving Averages Convergence-Divergence (MACD)

MACD which is considered as a leading indicator, has cut the Signal line from below on 3rd May, 2021 with MACD Histogram rising above 0 (zero) levels and is still above the Signal line.


3. Bollinger Bands

Since last few trading days, the price movement is following the upper Bollinger Band in case of Welspun India Limited stock giving a sell signal and correction could be seen in the same in upcoming days.


4. Relative Strength Index (RSI)

Since 06th May, 2021 the stock is in an overbought zone and could go below, RSI 14 - 60 levels for a while just to show a correction. Waiting some time for medium and long term investors could be profitable while shorting can give handsome returns.


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Sources


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