Shares of this micro-cap company operating in the textile industry hit a 20 percent upper circuit and 52-week high on Tuesday morning after the company reported a 94 percent YoY increase in net profit, along with strong revenue growth in its latest quarterly results.
Share Price Movement
During Tuesday’s trading session, VTM Ltd’s share price reached its 52-week high to Rs.88.71 per share, hitting a 20 percent upper circuit from the previous close of Rs.73.93 apiece. The shares have retreated since then and currently trading at Rs.86.15 each.
Rationale for Rise
The strong bullish movement in VTM Ltd’s stock price resulted from substantial revenue and net profit growth in the latest quarter. In its recent filing for the quarter ending September 2024, the company reported a 55 percent increase in revenue, reaching Rs.73.17 crore compared to Rs.47.24 crore in Q2 FY24. Sequentially, revenue also rose by 24 percent from Rs.59.14 crore in Q1 FY25.
During the same period, the company posted a significant 94 percent increase in net profits to Rs.9.77 crore in Q2 FY25 from Rs.5.04 crore in Q2 FY24 and 87 percent from Rs.5.23 crore in Q1 FY25.
In terms of return ratios, return on capital employed (ROCE) is currently at 7.33 percent, while return on equity (ROE) is at 5.55 percent. The company has a strong current ratio of 3.55 and a low debt-to-equity ratio of 0.07.
Export Footprints
VTM has established an export footprint across eight countries, recently expanding into home textile products. This new product line has contributed significantly, adding Rs.53.44 crores to exports and bringing the company’s total export turnover to Rs.98.48 crores in FY 2023-24.
Imports for the year amounted to Rs.7.56 crores, primarily comprising ten Picanol Air Jet Looms purchased at Rs.7.12 crores, with the remaining Rs.0.44 crores covering spare parts and consumables.
Manufacturing Capacity
VTM Ltd has a manufacturing capacity of 24 million meters of cotton grey woven fabric per year. The company operates 258 looms, including Sulzer, Airjet, and Jacquard machines, which support the production of various fabric types for both domestic and export markets.
About the Company
VTM Ltd specializes in producing specialty fabrics for both domestic and export markets. The company offers a diverse range of fabrics, including structured, dobby, plain, twill, satin, and jacquard designs.
Written by – Siddesh S Raskar
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