Vardhman Textiles Ltd's Q4FY18 consolidated net profit rises 3.26% yoy to Rs163.68cr

India Infoline Research Team | May 12, 2018 18:22 IST

The company’s consolidated revenue stood at Rs1,509.63cr, down 5.44% yoy and 8.4% qoq.

Vardhman Textiles Ltd Q4FY18

Consolidated Results Q4FY18: (Rs. in cr)

Q4FY18 YoY (%)
Revenue 1,509.63 [5.4]
EBITDA 259.24 [2.9]
EBITDA Margin (%) 17.17 45
Net Profit (adjusted) 163.68 3.3
***EBITDA margin change is bps
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Reco. Price

1206

Last updated on

08-May-2018



Vardhman Textile Ltd’s revenue declined by 5.4% yoy and 8.4% qoq to Rs1,510cr. EBITDA came in at Rs259cr, down 2.9% yoy. However, EBITDA grew by 14.9% on qoq basis. EBITDA margin expanded by 45bps yoy and 349bps qoq to 17.17% owing to decline in the cost of goods sold and employee benefit expenses. Adjusted PAT grew by 3.3% yoy and 20.8% qoq to Rs163.7cr.

• Cost of goods sold declined by 10.2% yoy and 17.7% qoq to Rs769.4cr.
• Employee benefit expenses declined by 2.4% yoy and 2.2% qoq to Rs123.8cr.
• Finance cost grew by 0.4% yoy and 25% qoq to Rs35.2cr.
• Depreciation and amortisation expenses declined by 30.9% yoy to Rs62.7cr. It grew by 3.5% qoq.

Con Call Highlights
• Currently, captive consumption of yarn stands at ~35% of total yarn production.
• Margin expansion on qoq basis is on account of lower raw material prices.
• Total yarn sales consist of ~35% and ~65% of blended/synthetic and cotton yarn respectively. Increase in the crude prices is likely to have some impact on blended/synthetic yarn margins. Company may pass on this impact to customers depending on global synthetic yarn prices.
• As per management, no renegotiation requests are received from customers on account rupee depreciation.
• Management expects that demand supply of cotton is expected to be in deficit for FY19. This will keep cotton prices high going forward.
• Company expects Indian cotton prices to move closer to international levels (currently Indian prices at 13% discount).
• Company also highlighted that industry yarn spreads in India may moderate on the back of increase in Indian cotton prices.
• Company is planning a capex of Rs1,400cr over next two years. This would be spread equally between the yarn and fabric segments.
• From this capex, company plans to add 100,000 spindles and modernize its existing units. In fabric segment it plans to increase processing capacity to 180mn mtrs from 140 mtrs currently.
• Share of the fabric sales is expected to increase to 40-42% from 35% currently, after completion of planned capacity addition.

Volume Data
Yarn, Grey Fabric and Processed Fabric’s sales volume declined by 6.1%, 7.3% and 5.5% yoy respectively during the quarter. 

In metric tonnes
Yarn Q4FY18 Q4FY17
Production 50,864 49,725
Sales (including internal transfer) 50,110 53,374
In Lac meters
Grey Fabric Q4FY18 Q4FY17
Production 434 426
Sales (including internal transfer) 420 453
In Lac meters
Processed Fabric Q4FY18 Q4FY17
Production 310 289
Sales 310 328

Technical View:

Vardhman Textiles Ltd ended at Rs. 1,223, up by 10.55 points or 0.87% from its previous closing of Rs. 1,212.45 on the BSE.
The scrip opened at Rs. 1,211.25 and touched a high and low of Rs. 1,231.20 and Rs. 1,202 respectively. A total of 10,474 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.



***Note: This is a NSE Chart

 

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