Vardhman Textiles Q1 Results Review - Inline Revenue, Healthy Margin Drives Earnings Beat: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Report.Vardhman Textiles Ltd. Q1 FY25 revenue was flat YoY and dropped 6% QoQ to Rs 23.1 billion, (broadly in-line with our estimate). We attribute the fall in revenue to 9%/7%/2% QoQ lower volumes in yarn, grey fabric and processed fabric, respectively, impacted by a challenging demand environment and elevated domestic cotton prices.Gross margin expanded 874 basis points YoY and 435 bps QoQ to 47.5% (above our estimate at 43.2%) to benefiting from lower cotton prices. Ebitda margin expanded 578 bps YoY and 254 bps QoQ to 15.1% (above our estimate of 13%). Ebitda jumped 62% YoY and 13% QoQ to Rs 3.5 billion, above our estimate of Rs 3.1 billion.Finance cost dropped 45% YoY and 38% QoQ to Rs 178 million. Depreciation fell 7% YoY (flat QoQ) to Rs 970 million. Other income fell 30% YoY and 2% QoQ to Rs 660 million. Profit before tax soared 73% YoY and 20% QoQ to Rs 3 billion, 24% above our estimate of Rs 2.4 billion. Tax rate was lower at 24.2% versus 26% in Q1 FY24.Consequently, Adjusted profit after tax soared 75% YoY and 19% QoQ to Rs 2.4 billion (25% above our estimate of Rs 1.9 billion). APAT margin expanded 444 bps YoY and 217 bps QoQ to 10.3% (above our estimate of 7.9%). Management expects the upcoming festive season in India and improving inventories in the U.K and U.S to drive demand in the coming quarters..Click on the attachment to read the full report:.Rupee Sinks To Second Worst In Asia Even As India Tops Overseas Inflows This Quarter.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Vardhman Textiles Q1 Results Review - Inline Revenue, Healthy Margin Drives Earnings Beat: Systematix

The brokerage has slightly raised its revenue estimate for FY25/26E by 3% each as it expects demand for fabric to improve.

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