IL&FS Investsmart has maintained buy rating on Vardhman Textiles in its report dated February 11, 2008. "During Q3FY08, Vardhman Textiles reported a moderate 12.5% YoY growth in topline. However, net profits plummeted 22%, in line with the falling operating margins that declined sharply due to a steep rise in cotton prices and lower yarn realisations. We expect margins in the yarn segment to remain under pressure, going forward, given the firm cotton prices. Nevertheless, Vardhman is likely to gain from its forward integration to processed fabric and sewing thread businesses. The company is scaling up its fabric and yarn capacities to become on of the largest integrated fabric manufacturers. This would drive Vardhman's earnings growth over the next two years and would also provide higher pricing flexibility. The stock trades at 4.4X our FY08 EPS. We maintain a 'Buy' on the stock." According to IL&FS Investsmart.
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