Vardhman Textiles Ltd. share price target

Gross margins for the quarter expanded significantly by 270 bps YoY to 49%, mainly on account of softening of cotton prices. However, negative operating leverage (employee, power & other expenses as a...

Vardhman Textiles Ltd (VTL), for Q3FY18, on a consolidated basis continued to witness weak operational performance, in-line with expectation. Higher raw material expenses, up 1,095bps YoY to 56.7% of sales, led to EBITDA margin contraction of 736 bps to 13.7%. Revenue grew by 12% to 1,648 crore, on the back of ~11% and 21% growth in the textiles and acrylic fibre segments, respectively. Lower operational performance and other income (down 34% to 38 crore) led to net profit declining by 29% to 136 crore. Sales volume of yarn grew 14% to 55,096 tonne and grey & processed fabric grew 4% to 759 lakh meters....

Vardhman reported healthy revenue growth of 12.3% YoY to | 1648.0 crore (I direct estimate: | 1538.5 crore). Revenues from textile segment grew 11.0% YoY to | 1584.3 crore, whereas revenues from acrylic fibre rose 21.0% YoY to | 86.3 crore albeit on a favourable base of demonetisation in Q3FY17 EBITDA margins for the quarter declined 740 bps YoY to 13.7% (Idirect estimate: 16.0%) mainly on account of higher raw material expense (cotton) by 1095 bps YoY. However positive operating leverage (employee and other expenses down 72 bps and 273 bps...

Vardhman Textiles Ltd (VTL), for Q2FY18, on a consolidated basis, continued to witness EBITDA margin pressure, in-line with expectation. Higher raw material cost (up 840bps to 55.8%) and employee expense (up 101bps to 8.9%) led to EBITDA margin contraction of 785bps to 13%. Revenue grew by ~2% to 1,523 crore while adjusted net profit decline by 42% to 133 crore. Management View: The management has maintained its view that margins could see some improvement from Q4FY18, with the expectation of higher acreage under cotton leading to softening of prices in the new cotton season 2017-18 (Oct-Sept)....

ICICI Securities Ltd | Retail Equity Research Consolidated revenues increased marginally by 1.9% YoY to | 1523.1 crore vs. estimated | 1555.6 crore. Revenues from the textile segment grew 1.6% YoY to | 1443.6 crore whereas revenues from acrylic fibre declined 10.3% YoY to | 92.0 crore EBITDA margins for the quarter declined 780 bps YoY to 13.0% (Idirect estimate: 14.5%) mainly on account of an increase in raw material expense (cotton) by 840 bps YoY. Subsequently absolute EBITDA de-grew 36% YoY to | 197.6 crore (I-direct estimate: | 226.2...

ICICI Securities Ltd | Retail Equity Research Vardhman Textiles (VTL) reported a mixed set of Q1FY18 numbers. Consolidated revenues increased 6.0% YoY to | 1562.0 crore vs. estimated | 1595.3 crore. Revenues from the textile segment grew 6.5% YoY to | 1513.3 crore whereas revenues from acrylic fibre declined 35.7% YoY to | 67.7 crore EBITDA margins for the quarter declined 707 bps YoY to 14.1% (Idirect estimate: 17.2%) mainly on account of an increase in raw material expense (cotton) by 738 bps YoY. Subsequently, absolute...

The management has indicated that the company may face challenges in the near term owing to an increase in domestic cotton prices and appreciation of the rupee against other currencies. However, a higher proportion of fabrics in revenue would provide stability to the margins. With its new printed fabric capabilities, Vardhman has entered into women's tops and expanded the range for men's shirts fabrics. This entry will likely help the company to attract new customers and acquire new orders from existing customers as well. Moreover it will reduce volatility which arises due to cotton as manmade fibre is used in this and will also lead to...

ICICI Securities Ltd | Retail Equity Research Vardhman Textiles (VTL) reported a mixed set of Q4FY17 numbers. Consolidated revenues increased 8.9% YoY to | 1608.5 crore vs. estimated | 1593.3 crore. Revenues from the textile segment grew 8.3% YoY to | 1549.7 crore whereas revenues from acrylic fibre declined 10.5% YoY to | 87.2 crore On account of increase in cotton prices, gross margins for the quarter contracted 560 bps YoY to 46.7%. Subsequently,...

ICICI Securities Ltd | Retail Equity Research Vardhman Textiles' (VTL) consolidated results came in below our estimates on the revenue front. However, they were better-thanexpected on the profitability front. Consolidated revenues remained flattish YoY to | 1530.9 crore vs. estimated | 1586.4 crore. Revenues from the textile segment declined marginally by 1.3% YoY to | 1435 crore whereas revenues from acrylic fibre witnessed a significant decline of 40% YoY to | 71.3 crore The company benefited from inventory gains on the back of low cost...

ICICI Securities Ltd | Retail Equity Research Vardhman Textiles' (VTL) consolidated results came in above our estimates on both the revenue and profitability fronts. Consolidated revenues grew 5% YoY to | 1564 crore (I-direct estimate: | 1502 crore). Consolidated EBITDA margins increased 320 bps YoY to 24.2% vs. our estimate of 18.8%. Consolidated PAT was at | 454 crore vs. | 137 on the back of a 40% equity stake sale in Vardhman Yarns & Threads and sale of land in Hoshiarpur...