Vardhman Textiles Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹531.00−₹8.00 (−1.48%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Vardhman Textiles Limited, together with its subsidiaries, manufactures and sells cotton and synthetic yarn, woven fabrics, and garments in India and internationally. It operates through Textiles and Fibre segments.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees24,097

Annual revenue₹9,689 Cr

How does it make money?

Turns over ₹9,689 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 24,097 employees supports ₹40.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹40.2 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 8.6% 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 is the outlook?

6 analysts covering the stock expect revenue to grow about 5.5% and earnings to grow about 7.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+5.5%

Est. earnings growth+7.6%

Analysts6

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -2% while net margin moved -4% 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-2%

Margin effect-4%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.8% a year
✗ Profit has declined at 2.1% a year

Quality vs. Valuation

Company Quality

45/ 100

Average

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

Valuation

73/ 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

17.8x

3Y Median

17.8x

40 monthly readings · mean 17.8x · range 13.2x–22.8x

Sector Median

69.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 17.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 74% below the peer median of 69.2x.

vs. its own history

Fair

17.8x median over 40 months · +0%

vs. sector peers

Cheap

69.2x median of 4 peers · -74%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.2x

PEG

0.36

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.18x 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 11.6% to 8.6% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹630 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 52% against revenue up -2% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 74% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Size brings its own risk
Small 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 12%✓ 14.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹630 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 8.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 17.8x✓ 17.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 12 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
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹15,371 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.8x

Fair

Fairly valued against the generic band

P/B Ratio

1.44x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹29.77

Profitable

Profitable on a per-share basis

ROE

7.1%

Weak

Weak capital efficiency

ROCE

8.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.18x

Low

Conservative leverage

Revenue Growth (YoY)

13.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

49.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.94%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹630 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

12.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.8%

Average

Average margins

Net Margin

8.3%

Average

Average bottom-line conversion

Current Ratio

4.15

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.21

Defensive

Steadier than the market

52W Range Position

47%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

541.1 / 570.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹9,925 Cr	₹9,320 Cr	₹9,599 Cr	₹9,689 Cr	-0.8%
EBITDA	₹1,490 Cr	₹1,176 Cr	₹1,475 Cr	₹1,404 Cr	-2.0%
EBITDA Margin	15.0%	12.6%	15.4%	14.5%	—
PAT (Net Profit)	₹795 Cr	₹632 Cr	₹883 Cr	₹745 Cr	-2.1%
EPS	₹27.95	₹22.2	₹31.05	₹26.18	-2.2%
ROE	9.3%	6.9%	8.9%	7.1%	—
ROCE	11.6%	9.3%	11.3%	8.6%	—
Total Debt	₹1,678 Cr	₹1,791 Cr	₹1,238 Cr	₹1,855 Cr	+3.4%
Free Cash Flow	₹1,231 Cr	-₹1,339 Cr	₹611 Cr	-₹630 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.8% a year).

🟡 EBITDA has been broadly flat over 3 years (-2.0% a year).

🟡 EBITDA Margin has held roughly flat at 14.5% over 3 years.

🔴 PAT (Net Profit) has shrunk at 2.1% a year over 3 years.

🔴 EPS has shrunk at 2.2% a year over 3 years.

🔴 ROE has fallen from 9.3% to 7.1% over 3 years (-2.2 pts).

🔴 ROCE has fallen from 11.6% to 8.6% over 3 years (-3.0 pts).

🔴 Total Debt has grown at 3.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1,231 Cr to -₹630 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹13,866 Cr

Total Liabilities

₹3,278 Cr

Cash & Equivalents

₹43 Cr

Operating Cash Flow

₹1,108 Cr

Capex

-₹1,738 Cr

Shareholding (proxy)

Institutional Holding

16.0%

Insider Holding

65.5%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

28 Aug 2026

Analyst Consensus

Recommendations

1 Buy · 3 Hold · 2 Sell

Target Price (Mean)

₹601.83

+13.3% vs CMP

Target Range

₹437 – ₹682

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 positive4 mixed1 general

VTL Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

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

Vardhman Textiles fixes Aug 28 record date for FY26 dividend

scanx.trade, 28 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Vardhman Textiles Limited Just Missed Earnings - But Analysts Have Updated Their Models

Simply Wall Street, 02 AugAnalyst view

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

Why Vardhman Textiles Share Price is Rising

Equitymaster, 01 Sept

Vardhman Textiles Q1 Results: Shares slip from day's high despite 50% jump in Q1 profit

CNBC TV18, 30 JulPrice 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.

Vardhman Textiles Share Price Target 2026: Expert Forecast, Catalysts and Key Risks

Univest, 12 MayAnalyst view

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Risk

WeakGrowth · Profitability

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 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑