India · Delayed Price · Currency is INR Vardhman Textiles Earnings Call Transcripts
Fiscal Year 2026
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Q3 results were stable year-over-year, with EBITDA margin at 15% amid high cotton costs and global trade headwinds. Strategic capacity expansions and green initiatives are underway, but industry margins remain pressured by structural cost disadvantages and trade uncertainties.
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Q2 FY2026 sales remained stable at INR 2,468 crore with a 15.5% EBITDA margin despite global headwinds and U.S. tariffs. Expansion projects are on track, and management expects margin normalization by Q4, contingent on trade deals and cotton import policies.
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Operational performance was stable or slightly improved versus last quarter, with gross margins up due to lower cotton prices. Ongoing investments in capacity and green energy are expected to support future growth, but margin pressure is likely if cotton prices remain high and trade uncertainties persist.
Fiscal Year 2025
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Q4 and FY25 saw improved results, with fabric driving margin gains despite ongoing global and domestic challenges. Major modernization and capacity expansion are underway, with management targeting higher returns and resilience amid tariff and cost headwinds.
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Q3 FY25 saw sequentially lower results due to high raw material costs in spinning, while fabric performed strongly with full utilization. Major CapEx projects are on track, aiming to boost margins by 200-300 bps by FY27, but near-term margin improvement depends on global cotton prices and policy changes.
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Margins remain under pressure due to high domestic cotton costs and global competition, but strong fabric segment performance and ongoing CapEx support profitability. Expansion into technical textiles and green energy is underway, with demand outlook stable but margin improvement dependent on raw material costs.
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Q1 FY25 saw improved margins and strong demand, aided by strategic raw material coverage and China Plus One tailwinds. CapEx was raised to INR 2,500 crore, with a focus on modernization and green power, but sustaining 15% margins remains challenging due to high domestic cotton prices.