Vardhman Textiles Limited has informed the Exchange about Transcript
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Vardhman Textiles reported a better-than-previous-quarter Q4 FY'25, calling it one of the best quarters ever for the fabric segment, with full-capacity utilization. However, management flagged significant headwinds: Indian cotton trades at $0.81–$0.82/lb versus international $0.66–$0.67/lb, putting spinners at a $0.03–$0.04 disadvantage, and domestic polyester/viscose is 18–20% costlier due to a BIS quality-control order acting as a non-tariff barrier. Fabric capacity is set to expand 38% by end-CY2025, with management guiding for ~10% fabric revenue growth in FY26 (~Rs.500 cr) and ~30% the year after (~Rs.1,000 cr) on a Rs.4,000 cr base, plus technical-textiles commissioning by Q3 FY26. Modernization CAPEX of ~Rs.1,200 cr (Rs.900 cr fabric, Rs.330 cr yarn) is largely capitalized, with only Rs.30–50 cr flowing through P&L as repairs. Management targets at least 15% EBITDA margin over existing costs once modernization and product-mix benefits flow through, aiming to fully absorb new capacity by FY28.
Near-term, spinning margins remain squeezed as long as Indian cotton stays expensive, and 10% US tariffs are causing short-term order uncertainty. The fabric business is the clear growth driver — capacity-led revenue and margin expansion in FY26–27 should cushion earnings. Shareholders should watch for US tariff clarity, Bangladesh land-route issues (10-day lead time increase), and progress on synthetic/technical textile commissioning in Q3.