Vardhman Textiles — Q4 FY26

Vardhman Textiles reported a decent Q4 FY26 performance, with gross margins expanding ~300bps QoQ, though EBITDA margins were impacted by a one-time mark-to-market forex loss of ~₹57-58 crore. The key positive is a structural turnaround in the spinning industry: ~11-12 million spindles have permanently shut, reducing effective capacity to 41-42 million spindles from a potential 59-60 million. Simultaneously, demand has surged—China's monthly yarn imports from India jumped from 7-8 million kg to 30 million kg, and US tariffs removal has boosted home textile exports to near-full utilization. Cotton prices have aligned globally, with spreads improving from 60-65 cents to 90-95 cents per kg. Management expects Q1 FY27 to be significantly better as fabric price hikes lag and the forex loss reverses. Risk: Sustainability of current spreads depends on cotton prices and China demand; any reversal could pressure margins.