Buy Vardhman Textiles; target of Rs 440: Emkay Global Financial

Emkay Global Financial is bullish on Vardhman Textiles has recommended buy rating on the stock with a target price of Rs 440 in its research report dated May 10, 2023.

Broker Research

May 12, 2023 / 16:12 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Vardhman Textiles

For Q4FY23, Vardhman reported 6% QoQ sales growth, owing to better utilization. EBITDAM came in at ~11%, leading to 66% QoQ growth in PAT (down 53% YoY). Sales during the quarter witnessed an uptick, while normalized margin still remains elusive as India cotton is at a 10-15% premium to international cotton. Management stated that demand from China is growing. Given low cotton-yarn spread, management presently has refrained from any near-term capacity addition (this year, 1lakh spindles have already been added), though the same will be relooked if margin improves.

Outlook

We maintain our BUY rating on the stock with an unchanged TP of Rs440. During the last two years, the company has registered extreme margins (high of 28% and low of 7%); though in a normalized scenario, 16-20% is realistic.

For all recommendations report, click here