Vardhman Textiles Ltd. share price target

Vardhman Textile (VTEX) revenue grew 13.3% YoY to INR27b in 1QFY27, led by improvement in yarn portfolio (+25% YoY), which was driven by higher realizations (+23% YoY).

Shares of the company have been split on March 24, 2022 (ex-date) pursuant to the shareholder approval granted for sub-division of shares in its meeting held on March 11, 2022. The record date for the same has been fixed as March 26, 2022. Subsequently, the shares of the company have...

Gross margin improvement of 405 bps YoY to 52.4% (QoQ decline of 350 bps on an exceptionally high base owing to use of low cost inventory) and operating leverage led to EBITDA margin expansion of 800 bps YoY to...

The yarn business (including internal transfer) volumes for Q4FY21 grew 6% YoY while fabric business volumes returned to the positive growth trajectory with a pick-up in demand and posted growth of 12% YoY. For FY21, volumes in the yarn segment were at 97% of pre-Covid levels while fabric volumes, which were severely impacted in H1FY21, exited the year with a recovery...

Vardhman Textiles' (VTL) revenues for Q3FY21 fell 4% YoY to | 1750 crore. Gross margin improvement of 340 bps YoY to 48.3% and lower power cost (down 120 bps YoY to 9.9%) enabled EBITDA margin expansion of 421 bps YoY to 15.8%. EBITDA was up 31% YoY at | 276 crore. Consequently, PBT grew 31% YoY to | 219 crore. However, PAT fell 13% to | 175 crore owing to deferred tax adjustment in the base quarter. The yarn business (including internal transfer) volumes grew 3% YoY to 61178 metric tonnes while fabric business volumes showed signs of a pickup in demand and recovered to 87% of pre-Covid levels (69% on Q2FY21)....

The company has seen a revival in demand for yarn, particularly in the international markets. However, realisations have been lower. Vardhman gradually increased its yarn capacity utilisation levels and is currently operating at close to 100% utilisation in the yarn segment. Yarn demand has been supported by a recovery in demand from Asian countries....

Vardhman Textiles posted a weak Q4FY20 performance due to lockdown impact in second half of March. Consolidated revenues fell 9.5% YoY to | 1596 crore due to 10% fall in textile segment. Though gross margins improved 340 bps YoY to 48.5% owing to lower input cost, negative operating leverage led to a fall in EBITDA margin by 80 bps to 14.1% with EBITDA down 15% to | 225.1 crore. Hence, PAT fell 18% YoY to | 149 crore....

The Indian cotton scenario was adverse for spinners in H1FY20 as cotton prices internationally fell significantly to ~50-60 cents/pound whereas domestic cotton prices were stable in the range of 80 cents/pound (owing to shortage of cotton crop). On the other hand, international yarn prices corrected with a steep decline in cotton prices. As per the VTL management, in the first six months, India's average monthly exports (yarn) fell to 74 million kg vs. run rate of 102 million kg (down 28%). India exports to China (monthly) for the first six months dropped to 20 mn kg vs. run rate 40 mn...

Due to the ongoing impact of the trade war between US & China, cotton yarn exports from India have declined. India exports ~ 110 mn kg of cotton yarn annually while domestic consumption was around 235 mn kg. Due to lower yarn imports by China, India's cotton yarn exports declined to ~75 mn kg leading to an influx of additional cotton yarn in the domestic market, which led to lower realisation for cotton yarn producers. Hence, margin for cotton...

The benefit of VTL's new capacity would come in phases and the major revenue impact would only be visible from H2FY20. VTL is focussing on increasing the share of fabrics in overall revenues and expanding its fabric capacity from 140 million metre to 180 million metre by the start of Q2FY20. Also, the company is adding 100,000 spindles, of which ~30,000 are expected to commence operation in May 2019 while the remaining 70,000 are expected to be operational by June-July 2019. Capex for expansion is ~ 1400 crore, out of which the company has spent ~800 crore in FY19 and will...

ICICI Securities Ltd | Retail Equity Research Revenues for the quarter grew 5% YoY to | 1729 crore (I-direct estimate: | 1699 crore). Revenues from the textile segment grew 5%...

ICICI Securities Ltd | Retail Equity Research Revenues for the quarter grew 10.6% YoY to | 1685 crore (I-direct estimate: | 1618 crore). Revenues from the textile segment grew 10% YoY to | 1591.8 crore while acrylic fibre reported healthy revenue growth of 28% YoY to | 117.5 crore Gross margins for the quarter improved 659 bps YoY to 50.8% (Idirect estimate: 48.9%) mainly on account of low cost cotton inventory. Subsequently, EBITDA margins improved 667 bps YoY to 19.6% (I-direct estimate: 17.0%, Q1FY19: 17.2%). Absolute EBITDA...

Vardhman Textiles Ltd (VTL), for Q1FY19 on a consolidated basis, reported decent numbers. Revenue grew ~8% YoY to 1,700 crore, aided by 7% growth in textile segment to 1,625 crore and 47% growth in acrylic fibre segment to 99 crore. EBITDA grew 32% to 292 crore. Lower raw material cost (down 91bps to 53.3% of sales) and other expenses (down 229bps to 21.7%) resulted in EBITDA margin expansion of 312bps to 17.2%. Net profit grew 7% to 159 crore, owing to lower other income (down 42%) and higher tax rate (29.5% vs 17.6% in Q1FY18). Management View: Maintained long term EBITDA margin guidance of 18-22%....

Revenues for the quarter grew 8.4% YoY to | 1700 crore (I-direct estimate: | 1639.4 crore). Revenues from textile segment grew 7% YoY to | 1625 crore while on a low base acrylic fibre reported healthy revenue growth of 47% YoY to | 99.5 crore Gross margins for the quarter improved 91 bps YoY to 46.7% (on a sequential basis, gross margins declined 234 bps). Decline in other expenses (down 7% YoY to | 205.3 crore) further supported EBITDA growth. EBITDA margins for the quarter expanded 310 bps YoY to...