Spinning capacity (operational)
41-42M spindles
-18M spindles vs potential
Permanent shutdown of ~11-12M spindles reduced effective capacity from ~53M to 41-42M.
VARDHMANTEXTILES
Other
2026-04-??
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.
✓ Verified against BSE filing
2-Min Summary
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.
Key Numbers
China monthly yarn imports from India
30M kg
+23M kg vs normal 7-8M kg
China's demand surged due to Xinjiang cotton ban and Bangladesh order shifts.
Yarn spread (30s combed)
90-95 cents/kg
+50% vs 60-65 cents low
Spread improved from worst levels due to higher yarn prices and rupee depreciation.
Export capacity utilization (home textiles)
90-100%
+30-40pp vs 50-60% low
Post US tariff removal, home textile exporters returned to near-full capacity.
Management Guidance
Q1 FY27 performance expected to be significantly better
Management expects Q1 FY27 to reflect improved spreads and reversal of one-time forex loss, with fabric price hikes lagging by 2-3 months.
revenueModernization capex completion by H1 FY27
90% of spinning modernization completed; remaining 10% to be finished in next 6 months, improving cost and flexibility.
capexNew capex plans in MP PMRA park by Dec-Jan
Land likely allotted by Dec-Jan; drawing board stage, finalization expected in 2-3 months, subject to sustainability.
expansionPerformance fabric plant full utilization in 6-9 months
New performance fabric line commissioned; expects full utilization in 6-9 months as orders ramp up.
growthKey Risks
Cotton price volatility and spread sustainability
Current spreads of 90-95 cents may not sustain if cotton prices fall or China demand weakens; management unable to predict beyond 3 months.
high · analyst_questionDuty-free cotton import policy uncertainty
Industry's request for duty-free cotton imports to ensure competitive raw material is pending government decision; if denied, cost disadvantage may return.
high · management_commentaryFabric price hike lag and customer resistance
Fabric and garment segments face resistance to price increases; lag of 2-3 months could compress margins if yarn prices correct.
medium · management_commentaryGeopolitical disruptions and hedge fund speculation
Iran-US tensions and speculative money in cotton futures could cause sudden price swings, impacting input costs and demand.
medium · data_observationNotable Quotes
The good news is one the US tariffs were over. As a result of that India became more competitive.
Today there's hardly any disruption as far as the long-term in the cotton prices have been in this the relative to each other.
Most of the spinners from India in export market are sold for 3 months as of now.