Vardhman Textiles (502986) Q4 24/25 earnings summary

Executive summary

• Q4 and FY25 results showed improvement over the previous quarter and the same quarter last year, despite ongoing global and domestic challenges in the textile sector, including geopolitical tensions and tariff uncertainties.

• Audited standalone and consolidated financial results for the year ended March 31, 2025, were approved and reported with an unmodified auditor's opinion.

• Board recommended a dividend of Rs. 5.00 per share, subject to shareholder approval.

• The spinning business faced significant headwinds due to high domestic cotton prices and restrictions on duty-free imports, making Indian mills less competitive compared to peers in Vietnam and Indonesia.

• The fabric segment delivered one of its best quarters, running at full capacity, driven by strong demand in key export markets and successful customer engagement.

Financial highlights

• Standalone revenue from operations for FY25 was Rs. 9,587.21 crore, up from Rs. 9,298.68 crore in FY24.

• Standalone net profit after tax for FY25 was Rs. 879.07 crore, compared to Rs. 607.63 crore in FY24.

• Consolidated revenue from operations for FY25 was Rs. 9,784.88 crore, up from Rs. 9,504.68 crore in FY24.

• Consolidated net profit after tax for FY25 was Rs. 886.72 crore, compared to Rs. 636.70 crore in FY24.

• EBITDA margin for the quarter was 11.4%, while textile EBIT margin was 12.5%, a reversal from historical trends due to unallocated costs and minor contributions from the acrylic fiber business.

Outlook and guidance

• Capacity expansion in fabric is set to increase production by 38% by end-2025, with full absorption targeted by FY28.

• Fabric revenue is expected to rise by 10% in FY26 and 30% in the following year, adding up to INR 1,500 crore over two years.

• Margin improvement is anticipated from modernization, automation, and product mix changes, with a target of at least 15% return on new CAPEX.

• Management remains cautious on margin outlook due to ongoing global uncertainties and tariff negotiations.

• The board recommended a dividend of Rs. 5.00 per share, reflecting confidence in future performance.