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Informist, Thursday, Jul. 30, 2026

By Devanshu Singla

MUMBAI – Vardhman Textiles Ltd. is expected to report sharply higher net profit and revenues for the June quarter due to continued higher utilisation of capacity in yarn and woven fabric segments. Additionally, the uptick in realisations, driven by an on-quarter increase in cotton price and better yarn off take, will support the earnings, according to brokerages tracking the company.

The textile manufacturer is expected to report a consolidated net profit of INR 3.44 billion for the June quarter, according to the average of estimates from four brokerages. This will be up over 66% on year and 86% on quarter. The company's consolidated net sales for the quarter are expected to be INR 28.19 billion, up 18% on year and nearly 13% on quarter, according to the estimates.

The highest estimate for the company's net profit is INR 4.83 billion from 360 ONE Capital Market Pvt. Ltd. and the lowest is INR 2.15 billion from Motilal Oswal Financial Services Ltd. The highest estimate for the company's net sales is INR 32.20 billion from 360 ONE Capital and the lowest is around INR 25.86 billion by Motilal Oswal.
 

The June quarter is an inflection quarter for the textile sector, supported by a meaningful recovery in spinning profitability, healthy export demand and improving policy visibility across key export markets, 360 ONE Capital said. The average domestic cotton prices have risen 9% on year and 14.4% on quarter to INR 177 per kilogram due to supply disruptions caused by the war in West Asia, Elara said. "Despite this, cotton yarn spreads expanded, up 36.2% YoY and 25.8% QoQ to INR136/kg (kilogram), as India's cotton currently trades at a discount to global benchmarks and nearly at par with US cotton—a dynamic that should support margin," the brokerage added.

The increase in cotton yarn realisations outpaced the rise in cotton costs, with benchmark 40s combed cotton yarn prices increasing by 19% to 21%, resulting in a 25% to 29% expansion in cotton yarn spreads, 360 ONE said. The sharp improvement in spreads is expected to drive a recovery in profitability for spinning companies, while integrated textile players should also benefit from improved margins across their textile operations, brokerages said.

Vardhman's earnings before interest, taxes, depreciation, and amortisation are estimated in the range of INR 3.50 billion and INR 6.68 billion according to three brokerage estimates. The highest estimate for the company's EBITDA is INR 6.68 billion from Elara Securities (India) Pvt. Ltd. and the lowest is INR 3.50 billion from Motilal Oswal.  

The company's margins are likely to expand by up to 985 basis points on year and 1,173 basis points on quarter, driven by improved yarn spreads and lower-inventory gains, Elara said.

Structural tailwinds such as China plus one diversification, the ratification of the India-UK free trade agreement in July, the anticipated India-EU free trade agreement, and broader supply chain realignment, remain firmly intact and should continue to underpin the sector's medium-term growth story, Elara said.

The company will report its earnings for the June quarter Thursday. Investors will closely watch for the impact of US tariff reductions on recovery of demand and profitability and order inflows from UK customers after the free trade agreement is implemented, brokerages said.

At 1004 IST, shares of Vardhman Textiles traded at INR 637.70 apiece on the National Stock Exchange, up more than 2% from Wednesday. The stock is up nearly 7% since the company announced its March quarter earnings on May 7.

All the five research reports on the company available with Informist have a "buy" recommendation on the stock with an average target price of INR 649 per share, which is around 2% higher than the stock's current market price.

Following are the Apr-Jun earnings estimates for Vardhman Textiles from four brokerage firms in descending order by estimate of net profit, in INR billion:

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Edited by Pankaj Aher

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