Vardhman Acrylics Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹44.00+₹1.41 (+3.31%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Vardhman Acrylics Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Vardhman Acrylics Limited manufactures and supplies acrylic fibers and tows in India. The company's products are used in hosiery, weaving, home furnishing, industrial, and other applications. It offers its products under the Varlan brand name.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees318

Annual revenue₹318 Cr

How does it make money?

Turns over ₹318 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 318 employees supports ₹100.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹100.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE25.9%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -25% while net margin moved +11% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-25%

Margin effect+11%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 9.3% a year
✗ Profit has declined at 6.1% a year

Quality vs. Valuation

Company Quality

52/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

78/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

4.3x

3Y Median

20.7x

40 monthly readings · mean 20.5x · range 12.5x–30.6x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 79% below its 3y median of 20.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 94% below the peer median of 69.2x.

vs. its own history

Cheap

20.7x median over 40 months · -79%

vs. sector peers

Cheap

69.2x median of 4 peers · -94%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

16.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 100% over 3 years.
Very low debt
Debt/Equity of 0.00x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 17.0% to 10.9% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Margins are compressingFinancial
EBITDA margin is down 2.8 points over 3 years.
🟡Low reported insider holdingOwnership
Reported insider holding is 0.0%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 100% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 79% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 94% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹2 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 9.5% to 6.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 5%✓ 6.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 10.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 20.7x✓ 4.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

8 good · 3 neutral · 0 weak

Market Cap

₹354 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

4.3x

Cheap

Cheap against the generic band

P/B Ratio

1.39x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.12

Profitable

Profitable on a per-share basis

ROE

10.7%

Moderate

Moderate capital efficiency

ROCE

10.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.00x

Low

Conservative leverage

Revenue Growth (YoY)

12.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

818.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.41%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹2 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

21.7%

Good

Healthy core-business profitability

Net Margin

12.7%

Good

Strong bottom-line conversion

Current Ratio

3.50

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.53

Defensive

Steadier than the market

52W Range Position

79%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

43.7 / 43.9

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹426 Cr	₹297 Cr	₹281 Cr	₹318 Cr	-9.3%
EBITDA	₹40 Cr	₹15 Cr	₹7 Cr	₹21 Cr	-19.1%
EBITDA Margin	9.5%	5.1%	2.3%	6.7%	—
PAT (Net Profit)	₹33 Cr	₹18 Cr	₹12 Cr	₹27 Cr	-6.1%
EPS	₹4.09	₹2.18	₹1.47	₹3.39	-6.1%
ROE	13.4%	7.2%	5.0%	10.7%	—
ROCE	17.0%	8.6%	6.5%	10.9%	—
Total Debt	₹0 Cr	₹1 Cr	₹0 Cr	₹0 Cr	-86.7%
Free Cash Flow	₹31 Cr	₹4 Cr	₹21 Cr	₹2 Cr	-62.9%

🔴 Revenue has shrunk at 9.3% a year over 3 years.

🔴 EBITDA has shrunk at 19.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.5% to 6.7% over 3 years (-2.8 pts).

🔴 PAT (Net Profit) has shrunk at 6.1% a year over 3 years.

🔴 EPS has shrunk at 6.1% a year over 3 years.

🔴 ROE has fallen from 13.4% to 10.7% over 3 years (-2.7 pts).

🔴 ROCE has fallen from 17.0% to 10.9% over 3 years (-6.1 pts).

🟢 Total Debt has shrunk at 86.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 62.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹343 Cr

Total Liabilities

₹89 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹7 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

0.0%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

28 Aug 2026

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

1 positive3 mixed2 general

Vardhman Acrylics net profit surges 827% in Q1FY27 on lower costs

scanx.trade, 28 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Vardhman Acrylics Share Price Target 2026: Rs 53.8 Analyst Forecast

Univest, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Vardhman Acrylics Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 29 Aug

Vardhman Acrylics e-voting for ₹177 crore deals starts May 28

scanx.trade, 28 May

Vardhman Acrylics Q1 FY27 Results Preview

Univest, 09 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Vardhman Acrylics Shares Rise 3.7% on Strong Q2 FY26 Results

HDFC Sky, 23 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

StrongFinancial Health · Profitability · Valuation

MiddlingBusiness Quality

WeakGrowth · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑