Check Before You Invest : Welspun Investments and Commercials Ltd

BSE: 533252 NSE: WELINV ISIN: INE389K01018

| Sector: BFSI | Industry: Finance - Investment

Snapshot

Q.1 Which industry/sub-sector does Welspun Investments and Commercials Ltd belong to?

Welspun Investments and Commercials Ltd belongs to the BFSI sector, operating specifically within the Finance - Investment segment.

Q.2 Is Welspun Investments and Commercials Ltd a good quality company?

Welspun Investments and Commercials Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is Welspun Investments and Commercials Ltd undervalued or overvalued?

Welspun Investments and Commercials Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Welspun Investments and Commercials Ltd a good buy now?

Welspun Investments and Commercials Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Welspun Investments and Commercials Ltd?

Welspun Investments and Commercials Ltd Operating Income growth is 27.12% for FY-2025, which is above its 5-year CAGR of -8.75%, indicating faster growth.

Q.2 Return on Assets of Welspun Investments and Commercials Ltd?

Welspun Investments and Commercials Ltd Return on Asset is 0.6%, which is below its 5-year historical median of 0.8%, indicating deteriorated earnings on assets.

	Current Level	5-year Historic Median
NPM%	70.57	67.27
PPOP%	25	25
RoA%	0.6	0.8

Q.3 Return on Equity (ROE) of Welspun Investments and Commercials Ltd?

Welspun Investments and Commercials Ltd Return on Equity is 0.6% for FY-2025, which is below its 5-year historical median of 0.9%, indicating the business is making worse use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Welspun Investments and Commercials Ltd?

Welspun Investments and Commercials Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 25% for FY-2025, which is in line with its 5-year median(25%), indicating stable margins.

Q.5 Net Profit Margin of Welspun Investments and Commercials Ltd?

Welspun Investments and Commercials Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 70.57% for FY-2025, which is above its 5-year median( 67.27%), indicating increasing margins.

Q.6 Total Asset growth of Welspun Investments and Commercials Ltd?

Welspun Investments and Commercials Ltd Total Asset growth is 66.33% for FY-2025, which is below its 5-year CAGR of 69.27%, indicating slower growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Welspun Investments and Commercials Ltd?

Promoters hold 74.58% of the Welspun Investments and Commercials Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Welspun Investments and Commercials Ltd vs Industry Peers?

Welspun Investments and Commercials Ltd AUM CAGR is 69.27%, compared to the 5-year industry median CAGR of 9.45%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Welspun Investments and Commercials Ltd vs industry peers

Welspun Investments and Commercials Ltd profit metrics are in line with the industry median level of -0.88%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	70.57	9.95
PPOP%	25	-13.4
RoA%	0.6	0.8

Q.3 Operating efficiency of Welspun Investments and Commercials Ltd vs industry peers?

Welspun Investments and Commercials Ltd ROCE (1.2) is below the industry median of (1.9); while the current ROE (0.9) are below than the 5-year average Industry ROE (1.2). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	70.57	9.95
PPOP%	25	-13.4
RoA%	0.6	0.8
ROCE%	0.8	1.9
ROE%	0.6	1.2

Valuation & price assessment

Q.1 Stock return of Welspun Investments and Commercials Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 38.6% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	38.6%	30.6%	68.5%	77.1%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	170.47	49.12	33.72
Price to Book	0.74	0.68	0.94
Price to Sales	105.16	37.02	12.44
EV to EBITDA	128.16	38.63	9.97

Q.4 Valuation ratios of Welspun Investments and Commercials Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 0.74% is higher than its historical median of 0.68%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Welspun Investments and Commercials Ltd return on invested capital (ROIC) is 0.62% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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