Vardhman Textiles Ltd| Quarterly Financial Results Q3 FY 2025–26

NEUTRAL SENTIMENT

⬤21st Jan 26

Summary : Vardhman Textiles reported a decline in profit for Q3 and 9M FY26 despite slight revenue growth, while actively monitoring US tariffs and new Indian labor codes.

Quarterly Report Analysis & Insights

Financial Disclosures

Consolidated Total Expenses Q3 FY26: 2,365.50 Cr (vs 2,272.16 Cr in Q3 FY25).
Consolidated Total Expenses 9M FY26: 6,837.77 Cr (vs 6,652.24 Cr in 9M FY25).
Key expenses include cost of materials, employee benefits, and other expenses.
Consolidated Revenue from operations Q3 FY26: 2,505.31 Cr (vs 2,465.30 Cr in Q3 FY25).
Consolidated Revenue from operations 9M FY26: 7,371.07 Cr (vs 7,276.31 Cr in 9M FY25).
Segment Revenue (Consolidated) Q3 FY26: Textiles 2,451.91 Cr, Acrylic Fibre 76.28 Cr.
Consolidated Total Assets as of Dec 31, 2025: 13,679.36 Cr.
Consolidated Total Liabilities as of Dec 31, 2025: 1,052.35 Cr.
Consolidated results include subsidiaries (Vardhman Acrylics, VTL Investments) and associates (Vardhman Yarns and Threads, Vardhman Special Steels, Vardhman Spinning and General Mills).
Both standalone and consolidated unaudited financial results are presented.
Consolidated results include parent, subsidiaries, and associates.

Corporate Overview

Indirectly serves US-based brands.
Monitors US government tariffs on textile imports.
Imposition of tariffs by the United States Government on textile imports.
Impact of new Indian Labour Codes on employee benefits.
Exposure to US market through US-based brands.
Subject to Indian labour legislations (new Labour Codes).
Manufacturing and sales of textile products (Yarns, Fabrics, Garments, Threads, Fibres, Steels).
Operates as a single segment: Textiles.
Formal and factual, focused on compliance and reporting.
Proactive in monitoring external developments and assessing impacts.
Actively engaged with US-based brands.
Textiles
Acrylic Fibre
Includes Capital Work in Progress and Capital Advances (1,327.61 Cr as of Dec 31, 2025 consolidated).

Risk Factors

US government tariffs on textile imports.
Impact of new Indian labor codes.
Decline in quarterly and nine-month profit.
Reliance on other auditors' reports.

Key Drivers

Slight revenue growth year-on-year.
Issued employee stock options scheme.
Proactive monitoring of US tariff developments.
Actively engaging with US-based brands.

Auditor’s Report

Limited review conclusion, not an audit opinion.
Interim financial results of one subsidiary and two associates not reviewed by their auditors, deemed not material to the Group.

Board Commentary

Impact of US government tariffs on textile imports.
Financial implications of new Indian Labour Codes.
New Labour Codes (Code on Wages, Industrial Relations, Social Security, Occupational Safety, Health and Working Conditions) notified by Government of India.
Issued 10,000 equity shares under Employee Stock Options Scheme.
Capital Work in Progress and Capital Advances (1,327.61 Cr consolidated as of Dec 31, 2025).

Corporate Governance

Audit Committee reviewed the financial results.

Management Discussion & Analysis

Future Strategy

Assessing and reviewing strategies regarding US tariffs.
Making necessary adjustments to financial statements if required by tariffs.
Monitoring regulatory developments for new Labour Codes.
Evaluating accounting implications of new Labour Codes.

Industry Overview

Textile industry facing potential tariff challenges in US market.

Macroeconomic Outlook

Monitoring US government tariffs on textile imports.
Evaluating impact of new Indian Labour Codes.

Operational Focus Areas

Engaging with customers through various pricing strategies.
Ensuring compliance with new labour legislations.

Performance Drivers

Revenue from operations slightly increased year-on-year.
Profit after tax declined for the quarter and nine months.

Risk Control Measures

Actively engaged with customers using various pricing strategies.
Continuously assessing and reviewing strategies for tariffs.
Monitoring regulatory developments for Labour Codes.

Critical Risks

Tariffs imposed by the US Government on textile imports.
Financial impact of new Indian Labour Codes on employee benefits.