Vardhman Textiles has filed the transcript of its Q4 FY26 earnings conference call with BSE Limited and the National Stock Exchange of India, in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The call was held on May 8, 2026, at 4:00 p.m. and was hosted by 360 ONE Capital, with the transcript submission signed by Company Secretary Sanjay Gupta on May 12, 2026.

Conference Call Details

The key parameters of the earnings conference call disclosure are summarised below:

Macro Environment and Industry Dynamics

Managing Director Mr. Neeraj Jain opened the call by outlining the key macro developments that shaped the period. He noted that the removal of U.S. tariffs restored India's competitiveness, enabling garment exporters—who had been operating at 50%–60% capacity utilisation and absorbing heavy discounts—to recover toward 90%–100% utilisation. Simultaneously, cotton prices moved significantly, with New York futures rising from $0.61–$0.63 to as high as $0.82–$0.83, and Indian cotton prices moving from INR52,000–INR53,000 per candy to INR67,000–INR68,000 per candy. Mr. Jain attributed this rally to a convergence of factors: reduced global closing stocks of cotton, lower crop estimates in India (projected at 29 million bales versus 31–31.5 million bales the prior year), a smaller Australian crop (41 million bales versus an expected 55 million bales), drought conditions in U.S. Texas cotton-growing regions, and rising synthetic fibre prices driven by crude oil increases linked to Iran-U.S. geopolitical tensions. Acrylic fibre prices rose by approximately INR80–INR85 per kg, while polyester fibre prices increased by INR25–INR30 per kg during the period.

Spinning Spreads and Yarn Demand

Mr. Jain highlighted a significant improvement in spinning spreads, driven by both demand recovery and raw material price alignment. He noted that approximately 11–11.5 million spindles have permanently exited the Indian spinning industry, reducing effective working capacity from a potential 59–60 million spindles to an estimated 41–42 million spindles. This structural capacity reduction, combined with a surge in Chinese yarn imports from India, materially tightened the supply-demand balance. China's monthly yarn purchases from India rose from an average of 7–8 million kg to approximately 30 million kg, pushing India's total monthly yarn exports from approximately 100 million kg to over 120 million kg.

The impact on yarn prices was substantial, as illustrated below:

Mr. Jain noted that most Indian spinners are currently sold forward for approximately two to three months in the export market. He also mentioned that a mark-to-market foreign exchange loss of approximately INR57–INR58 crores was provided in Q4 on account of the sharp rupee movement to INR94.80 on March 31, which impacted the quarter's margins but is expected to reverse in subsequent quarters.

Fabric, Garments, and Upstream Segments

On the fabric segment, Mr. Jain acknowledged that price increases lag raw material cost movements by approximately two to three months, but noted that selective increases are being pushed through with customers. He indicated that demand for fabric is not weak, and that most fabric producers—both knitting and woven—are working to pass on higher input costs. The company's direct export share has remained stable at approximately 44%–45% of revenue.

On garments, Mr. Jain stated that the company's existing garment business is performing well, and the immediate focus is on expanding capacity to achieve viability at scale. The average realization per garment is approximately $7.50. No decision has been made on a large-scale garment expansion; the current step is to evaluate whether the expanded capacity can be made profitable before committing further.

Operational and Capex Updates

Vardhman has completed approximately 90% of its spinning-side modernisation capex, enhancing flexibility, quality, and cost efficiency. Key operational milestones and near-term plans are summarised below:

Mr. Jain noted that on the fabric side, the company currently has surplus capacity and aims to improve utilisation over the next six months before finalising further expansion plans. He also indicated that the company is evaluating new spinning capacity additions, with plans expected to be finalised within the next two to three months, aligned with anticipated demand from Free Trade Agreements with the U.S., UK, and EU.

Industry Structure and Outlook

Mr. Jain provided a detailed structural view of global spinning capacity. He noted that China has reduced its spinning capacity from a peak of 112 million spindles to 84 million spindles and is unlikely to expand significantly, particularly given the government's stated intent to reduce cotton cultivation in the Xinjiang region. Pakistan faces structural constraints around power availability and political stability. Vietnam's small population and rising per capita income are redirecting labour toward electronics and services. Bangladesh, while dominant in garmenting with approximately $54–$55 billion in exports, has spinning utilisation of only 55%–60% and faces cotton import dependency that limits large-scale spinning expansion.

Mr. Jain expressed optimism that India, as the world's second-largest spinning nation even at 41–42 million operational spindles, is well-positioned to capture incremental demand from FTAs. He reiterated the industry's longstanding request for duty-free cotton imports to ensure raw material availability at internationally competitive prices, noting that the Ministry of Textiles has already written to the Finance and Agriculture Ministries on this matter. He also credited the Cotton Corporation of India (CCI) for aligning its selling prices to long-term international benchmarks over the past six to nine months, which helped restore spinning economics. Closing the call, Mr. Jain expressed optimism that the next year should be better for most textile companies, including Vardhman, supported by structural capacity rationalisation, improving spreads, and the potential demand uplift from FTAs.

Vardhman Textiles has released its audited standalone and consolidated financial results for the quarter and year ended March 31, 2026, as approved by the Board of Directors at its meeting held on May 7, 2026. The results were reviewed by the Audit Committee on May 6, 2026, and audited by Deloitte Haskins & Sells LLP, which issued an unmodified opinion on the standalone financial results. Pursuant to Regulation 47 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the financial results were published in "Desh Sewak" and "Business Standard" on May 8, 2026, as filed by Company Secretary Sanjay Gupta. The Board has recommended a dividend of Rs. 5.00 per share on fully paid-up equity shares, subject to approval by members at the Annual General Meeting.

Standalone Financial Performance

On a standalone basis, Vardhman Textiles reported a decline in profitability for the year ended March 31, 2026, compared to the previous year. Revenue from operations stood at Rs. 9,652.33 crores, while total income including other income came in at Rs. 9,927.75 crores. Profit after tax for the full year was Rs. 740.02 crores, compared to Rs. 879.07 crores in the previous year. Basic and diluted earnings per share for the year stood at Rs. 25.58, against Rs. 30.40 in the prior year.

The following table summarises the standalone financial results:

Consolidated Financial Performance

On a consolidated basis, which includes subsidiaries Vardhman Acrylics Limited and VTL Investments Limited, and associates Vardhman Yarns and Threads Limited, Vardhman Special Steels Limited, and Vardhman Spinning and General Mills Limited, the group reported consolidated revenue from operations of Rs. 9,869.05 crores for the year ended March 31, 2026. Consolidated profit for the period stood at Rs. 753.20 crores, compared to Rs. 886.72 crores in the prior year. Net profit attributable to owners of the company was Rs. 745.25 crores, against Rs. 883.27 crores previously. Consolidated basic and diluted EPS stood at Rs. 26.18 for the year, versus Rs. 31.05 in the prior year.

Segment Performance

The group operates across two reportable segments: Textiles and Acrylic Fibre. For the year ended March 31, 2026, the Textiles segment contributed revenue of Rs. 9,652.33 crores, while the Acrylic Fibre segment contributed Rs. 318.57 crores. After adjusting for inter-segment revenue of Rs. 101.85 crores, net consolidated revenue from operations stood at Rs. 9,869.05 crores. On a profitability basis, the Textiles segment reported pre-tax, pre-interest profit of Rs. 1,007.87 crores for the year, while the Acrylic Fibre segment reported Rs. 18.40 crores.

Balance Sheet and Cash Flow Highlights

As at March 31, 2026, standalone total assets stood at Rs. 13,343.10 crores, up from Rs. 11,899.82 crores in the prior year. Total equity on a standalone basis was Rs. 10,187.73 crores. On a consolidated basis, total assets were Rs. 13,865.55 crores, with total equity at Rs. 10,587.79 crores. Standalone net cash generated from operating activities for the year was Rs. 1,101.81 crores, while net cash used in investing activities was Rs. 1,513.60 crores, primarily on account of capital expenditure of Rs. 1,732.45 crores. Notably, property, plant and equipment increased significantly, largely due to the capitalisation of a new technical textile unit in Baddi and an additional processing line in Budhni, aggregating Rs. 570 crores, following commencement of commercial production on March 1, 2026 and March 7, 2026, respectively.

Key Notes and Regulatory Disclosures

During the year ended March 31, 2026, the company issued 1,07,000 equity shares having a face value of Rs. 2 per share under its Employee Stock Options Scheme. The Government of India, vide notification dated November 21, 2025, notified the Labour Codes, which consolidate and replace existing multiple labour legislations. In accordance with Ind AS 19, the company recognised past service costs of Rs. 23.58 crores in the quarter ended December 31, 2025, and an additional Rs. 8.90 crores in the current quarter ended March 31, 2026, both included under employee benefit expenses. Additionally, there was a reduction in tax expense in the current quarter due to the reversal of income tax provisions of previous years amounting to Rs. 16.98 crores, following the settlement of certain tax litigations. The results were submitted to BSE Limited and the National Stock Exchange of India Ltd in compliance with Regulations 30 and 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and were signed by S.P. Oswal, Chairman & Managing Director, on behalf of the Board of Directors.

Q4 FY26 Conference Call

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 360 ONE CM Research organised a conference call to discuss the 4QFY26 results on Friday, May 8, 2026, at 04:00 p.m. IST. The management team represented at the call included Mr. Neeraj Jain (Joint Managing Director), Mr. Sushil Jhamb (Director Raw Materials), Mr. Rajeev Thapar (CFO), Mr. Mukesh Bansal (EVP – Fabric Marketing Head), and Mr. Varun Malhotra (Head of Finance). Participants could join using dial-in numbers +91-22-6280 1222 or +91-22-7115 8123, with international toll-free access available across multiple countries including the USA (18667462133), UK (08081011573), and Singapore (8001012045).