Vardhman Textiles Limited , a leading Indian textile manufacturer, has reported a stable operational performance for the first quarter, despite facing significant challenges in the global textile market.

Key Highlights

• Operational performance in Q1 was at par or slightly better than the previous quarter, excluding extraordinary items.
• Indian cotton traded at a premium of $0.80-$0.82 per pound during the quarter, rising to $0.85 in July.
• The Minimum Support Price (MSP) for the upcoming cotton season increased by nearly 8%, making Indian cotton among the most expensive globally.
• Cotton Corporation of India (CCI) bought 30% of total cotton produced and increased prices by INR 2,500-3,000 per candy in the past month.
• Indian mills doubled cotton imports to 35-40 lakh bales compared to the typical 15-18 lakh bales annually.

Cotton Cost Pressures

The company faced significant challenges as Indian cotton continued to trade at a premium to international prices. The situation was further exacerbated by the increase in Minimum Support Price (MSP) for the upcoming cotton season, which rose by nearly 8%. This has made Indian cotton among the most expensive globally, putting pressure on the company's margins.

Sagrika Jain, Executive Director of Vardhman Textiles, stated, "The MSP for the upcoming cotton season has already been announced with an increase of nearly 8%, making Indian cotton even more expensive in the future."

Global Trade Uncertainties

The quarter began with significant global trade disruptions, particularly the imposition of new U.S. tariffs on textile imports. This led to market volatility and cautious buyer behavior, resulting in delayed orders and inventory adjustments.

"U.S. buyers adopted a more cautious stance, delaying new orders while working on tariff mitigation strategies and adjusting inventory levels amidst softening retail demand due to inflationary pressures," Ms. Jain explained.

Diversified Geographic Exposure

Despite the challenges, Vardhman Textiles' diversified geographic exposure provided stability to its operations. Markets such as the UK, EU, Japan, South America, Egypt, Australia, and the domestic Indian market remained relatively stable, enabling the company to maintain healthy capacity utilization.

Capacity Expansion and Utilization

The company reported that both its yarn and fabric divisions operated at full capacity utilization during the quarter. Vardhman Textiles is also progressing with its fabric expansion plans, which are expected to contribute meaningfully from Q3 onwards.

Neeraj Jain, Joint Managing Director, commented on the capacity utilization, saying, "On the spinning side, we were running full capacity and even on the fabric side, we were practically running the full capacity."

Financial Performance

While specific financial figures were not disclosed, the management indicated that yarn margins were around $0.70 for Indian spinners versus an international spread of $0.85-$0.90. Fabric margins were reported to be in the range of 17-18%.

Future Outlook

Looking ahead, Vardhman Textiles remains cautiously optimistic. The company is focusing on driving modernization, refining its product mix, launching new product lines, optimizing costs, and improving operational efficiencies.

Sagrika Jain concluded, "We believe that policy anomalies and trade barriers will eventually correct. So our goal continues to be well prepared so that we can fully capitalize on the opportunities once the external environment improves."

As Vardhman Textiles navigates through these challenging times, its strong market presence, emphasis on operational efficiency, and commitment to quality are expected to remain the pillars of its business and future growth strategy.

Vardhman Textiles Limited , a leading integrated textile manufacturer, has announced the commencement of commercial production for approximately 17,000 spindles as part of its ongoing capacity expansion plan. This development marks a significant step in the company's growth strategy, following its earlier capex plan announcement in May 2024.

Q1 FY26 Financial Performance

For the quarter ended June 30, 2025, Vardhman Textiles reported a mixed financial performance:

The company's revenue from operations increased by 3.2% year-on-year, reaching Rs. 2,342.32 crore. However, EBITDA declined by 3.0% to Rs. 397.00 crore, with the EBITDA margin contracting by 108 basis points to 16.4%. Profit After Tax (PAT) saw a more significant decline of 11.1%, settling at Rs. 202.00 crore, with the PAT margin decreasing by 137 basis points to 8.3%.

Production and Sales Performance

Vardhman Textiles reported mixed results across its product lines for Q1 FY26:

Yarn

• Production increased by 2.6% year-on-year to 68,639 metric tons
• Sales (including internal transfers) rose by 3.7% to 65,329 metric tons

Grey Fabric

• Production decreased by 5.3% year-on-year to 496 lac meters
• Sales (including internal transfers) declined by 2.9% to 497 lac meters

Processed Fabric

• Production decreased by 2.8% year-on-year to 410 lac meters
• Sales (including internal transfers) increased by 2.7% to 418 lac meters

Expansion and Future Outlook

The company's recent commencement of commercial production for 17,000 spindles is part of a larger capacity expansion plan. Vardhman Textiles had previously announced a total capex of Rs. 3,535 crore, which includes:

• Expansion of yarn capacity
• Increase in processed fabric capacity by 31 million meters annually
• Addition of 18 million meters annually in synthetic woven fabric capacity
• Modernization, automation, and technological upgradation initiatives
• Green capex projects

These expansion efforts are expected to strengthen Vardhman Textiles' position in the market and potentially drive future growth.

Conclusion

While Vardhman Textiles has shown progress in its expansion plans, the company faces challenges in maintaining profitability amidst a competitive market environment. The mixed Q1 FY26 results highlight the need for continued focus on operational efficiency and market adaptation. As the textile industry navigates through various economic factors, Vardhman Textiles' strategic investments in capacity and technology may prove crucial for its long-term success.