Vardhman Textiles (502986) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 saw improved financial performance, with consolidated revenue from operations reaching ₹2,703.08 crore, up from ₹2,385.66 crore in Q1 FY26, and PAT increasing 41% year-over-year to ₹285 crore, with PAT margin at 10.5%.

• EBITDA rose 33% year-over-year to ₹528 crore, with margin improving by 295 bps to 19.4%.

• Spinning margins benefited from favorable raw material inventory and rising yarn prices, with strong demand from China and stable international cotton prices.

• Continued focus on sustainability, targeting net zero emissions by 2045 and 60% green power by FY28.

• Fabric business lagged due to missed US orders and new capacity ramp-up, but approvals from major brands signal future growth.

Financial highlights

• Standalone revenue from operations for Q1 FY27 was ₹2,648.18 crore, up from ₹2,342.32 crore in Q1 FY26.

• Cotton yarn spreads averaged $0.90/kg in Q1, historically strong compared to prior years.

• EBITDA margin improved to 19.4% from 16.5% year-over-year and 14.1% sequentially.

• EPS for Q1 FY27 stood at ₹9.85, up from ₹6.97 in Q1 FY26.

• Synthetic fabric business utilization at 15-20%, with plans to reach 70-80% in six months.

Outlook and guidance

• Management expects continued strong demand for yarn, especially from China, and sees stable to rising cotton prices due to global supply constraints.

• Margins may moderate by 100-150 bps post-Q2 but are expected to remain resilient at 13-14%.

• Top-line growth will be driven by ramp-up in fabric and synthetic fabric utilization, and new open-end spinning capacity.

• Green capex initiatives underway, expected completion by FY27.

• Garment unit capacity expansion to 4.5 million shirts per annum by end of FY27.