Vardhman Textiles (502986) Q4 19/20 earnings summary

Executive summary

• FY 2019-20 consolidated revenue was ₹6,735 crore and PAT ₹590.97 crore; COVID-19 disruption hit production and sales in the final quarter.

• Export sales were ₹2,509.71 crore, down 1.18% YoY; yarn and processed-fabric output increased to 212,946 MT and 141 million meters.

• Financial strength and a gradual export-led recovery supported operations; spinning capacity utilization was ~80% at the time of reporting.

Financial highlights

• Consolidated revenue from operations ₹6,735 crore vs ₹6,877.92 crore YoY; EBITDA ₹1,123.96 crore vs ₹1,432.41 crore.

• Consolidated PAT ₹590.97 crore vs ₹740.55 crore; basic EPS ₹102.22 vs ₹129.45.

• Standalone revenue ₹6,325.15 crore vs ₹6,414.58 crore; PAT ₹545.49 crore vs ₹695.88 crore.

• Consolidated operating cash flow was ₹849.41 crore vs ₹498.98 crore; investing cash outflow ₹379.02 crore and financing cash outflow ₹295.59 crore.

Outlook and guidance

• Management expected Indian textile and clothing exports to decline 15%-20% in FY 2020-21; cotton-yarn exports recovered to ~100 million kg per month, with reduced margins.

• Yarn exports had approached prior-year levels and spinning utilization was ~80%; fabric demand was gradually improving, with recovery expected to a large extent before FY-end.

• Capacity utilization, operating efficiency and post-pandemic performance were key priorities; management cited financial strength to navigate the downturn.