This Textile stock which deals in the business of manufacturing Yarn, Acrylic Fiber, Fabric, and Garments in focus after the announced capacity expansion of around Rs. 1 crore.
Price Action
With a market capitalization of Rs. 13,780 Crores, the shares of Vardhman Textiles Limited were up by 1.8 percent in the day’s trade touching a day’s high of Rs. 481.65 per share. The stock reiterated from the day’s high and was trading at Rs. 477.60 per share which is up 0.97 percent higher from the previous closing price of Rs. 473 apiece.
What Happened
The company has been approved to increase its processed fibre capacity at Vardhaman Fabrics in Madhya Pradesh by about 31 million meters p.a. with an expected capital investment of Rs. 350 crores. Currently, the company has 75 million metric p.a of capacity of processed fabric which is around 90 percent utilization and the capacity is expected to be done within two years. This expansion is due to meet the increasing demand for processed fabric domestically and for export.
About the Company
Vardhman Textiles Limited was established in 1973 and headquartered in Ludhiana. The company specializes in producing a wide range of products, including woven fabrics, sewing threads, cotton, and synthetic yarns. Vardhman operates over 15 manufacturing units and has a significant presence in both domestic and international markets exporting to over 57 countries.
Their business model focuses on vertical integration, allowing it to control the entire production process from fiber to finished fabric. By leveraging strategic alliances and advanced technologies, Vardhman aims to enhance product quality and meet diverse customer needs effectively.
Products and Services
They sell a range of textile products which includes cotton yarn, synthetic yarn, woven fabrics, and sewing threads. The company also produces acrylic fiber and various value-added products such as organic and melange yarns. Vardhman serves both domestic and international markets, focusing on high-quality manufacturing and practices to meet diverse customer needs.
Financials & Ratios
Its Revenue from operations grew by 4.3 percent year on year from Rs. 2,397 Crores in Q2FY24 to Rs. 2,502 Crores in Q2FY25, accompanied by profits of Rs. 136 Crores to Rs. 197 Crores.
In terms of Return ratios, it has reported a return on equity (ROE) of 7.21 percent and a return on capital employed (ROCE) of 8.84 percent. It has reported a debt-to-equity ratio of 0.2.
Shareholding Pattern
As of September 2024, the shareholding pattern with the promoter’s stake holding a share of 64.19 percent in Vardhman Textiles, Foreign Institutional Investors (FII) holding around 6.03 percent, Domestic Individual Investors (DII) holding around 16.59 percent, and the public holding around 13.18 percent.
Written by Santhosh S
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