Vardhman Textiles Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Vardhman Textiles Ltd filed with BSE on 03 Aug 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Vardhman Textiles reported an improvement in Q1 FY27 results in both percentage and absolute terms, driven by better yarn sizes and a partial trading gain on raw materials as yarn prices adjusted upward. Management said the fabric business was comparable to last year's first quarter but around 3-4% lower than the fourth quarter, citing a missed U.S. tariff sampling season, while spinning utilization was full with good margins. Management also discussed cotton price and crop expectations globally, ongoing capex including biomass boilers, an open-end project, and garment and technical textile capacity expansions.
Numbers mentioned
Cotton yarn spread: USD0.90 per kg (Q1 FY27)
p. 14
“In this period, it was ranging about USD0.90 per kg of yarn.”
Neeraj Jain, page 14 of the filed PDF · View the filing
Yarn export from India: 110 million kg
p. 5
“The total export of yarn from India, it used to be about 95 million, 97 million kg or less than 100 million kg, which has increased to about 110 million kg as of now.”
Neeraj Jain, page 5 of the filed PDF · View the filing
Synthetic fabric capacity utilization: 15%-20% (current)
p. 7
“So our utilization is about 15%, 20% only as of now.”
Neeraj Jain, page 7 of the filed PDF · View the filing
Synthetic fabric capacity: 15 lakh meters per month
p. 7
“we have a capacity of 15 lakh meters per month”
Neeraj Jain, page 7 of the filed PDF · View the filing
Indian cotton price: INR64,000 per candy (current)
p. 5
“The Indian cotton, which was ruling at about INR55,000 a candy has also increased to today, the CCI price is close to about INR64,000.”
Neeraj Jain, page 5 of the filed PDF · View the filing
Existing garment capacity: 7,000 shirts per day
p. 11
“our existing capacity is only about 7,000 shirts per day, which is too smaller capacity”
Neeraj Jain, page 11 of the filed PDF · View the filing
Peak revenue from garment capacity at 100% utilization: INR300 crores
p. 12
“Close to about INR300 crores would be […].”
Neeraj Jain, page 12 of the filed PDF · View the filing
India spindle closures: 12-13 million spindles (last 3 years)
p. 6
“the industry estimate was almost 12 million to 13 million spindles got closed permanently”
Neeraj Jain, page 6 of the filed PDF · View the filing
China spindle count decline: 116-117 million to 84-85 million
p. 16
“from a peak of about 116 million, 117 million spenders, they are down to about 84 million, 85 million as of now”
Neeraj Jain, page 16 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Spinning margin — 13%-14%
stated conditionally by Neeraj Jain
p. 14
“My view is, as I mentioned earlier also, we came down to 10%, 11%, which was really a kind of a desperate situation. But my belief 13%, 14% could be the right way of looking at it, which could be -- if we convert it into the margins available per kg of yarn will give us a conversion of about $0.80, $0.85, $0.90.”
Neeraj Jain, page 14 of the filed PDF · View the filing
Yarn conversion margin
stated firmly by Neeraj Jain
p. 9
“No, surely, it will moderate. So there's no doubt about the same.”
Neeraj Jain, page 9 of the filed PDF · View the filing
Open-end project capacity — 55-60 tons per day · about 10 months
stated firmly by Neeraj Jain
p. 6
“we have also started working on the open-end project with a capacity of about 55, 60 tons per day. So the construction just started last week, and I'm hoping, maybe next 10 months' time or so, this capacity will also be available.”
Neeraj Jain, page 6 of the filed PDF · View the filing
Dhar land availability — by December
stated conditionally by Neeraj Jain
p. 6
“Going by the physical progress of that land, I expect the land will be available to us by December.”
Neeraj Jain, page 6 of the filed PDF · View the filing
Synthetic fabric capacity utilization — 70%-80% · next 6 months
stated as an aspiration by Neeraj Jain
p. 7
“I'm hoping that our idea is within the next 6 months, we want to reach at 70%, 80% capacity utilization, which is 20% as of now.”
Neeraj Jain, page 7 of the filed PDF · View the filing
Garment capacity ramp-up — full utilization at doubled capacity · 1 year
stated conditionally by Neeraj Jain
p. 12
“So by the time we take full advantage of actual utilization, it could be 1 year from today.”
Neeraj Jain, page 12 of the filed PDF · View the filing
Capex spillover to FY28 — INR800-900 crores · FY28
stated firmly by Neeraj Jain
p. 13
“So most of this capex, I think only about INR800 crores, INR900 crores will go to the next year, remaining will be completed -- it's already completed or will get completed within this year.”
Neeraj Jain, page 13 of the filed PDF · View the filing
Power projects completion — next 3 months
stated firmly by Neeraj Jain
p. 13
“all the power projects will be completed in the next 3 months' time”
Neeraj Jain, page 13 of the filed PDF · View the filing
Dhar project construction start — once power visibility is clear
stated conditionally by Neeraj Jain
p. 13
“So we'll start it only once we have more visibility that the government is clear that there will be a position to give us power on this site.”
Neeraj Jain, page 13 of the filed PDF · View the filing
Cotton prices — next 1-2 years
stated as an aspiration by Neeraj Jain
p. 5
“there could be -- I mean, as I mentioned in the last call also, it looks like after 3 years, this will be a year where the production could be lower than the consumption.”
Neeraj Jain, page 5 of the filed PDF · View the filing
Return on capital employed — 5 years
stated as an aspiration by Neeraj Jain
p. 15
“No, I'm not saying 2, 3 years, but definitely 5 years is a period where my personal belief, yes, it could be.”
Neeraj Jain, page 15 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Export orders cover about 90-95 days and domestic about 45-50 days, in line with historical averages.
Answered by Neeraj Jain
Asked by Prerna Jhunjhunwala: What is the order book situation in spinning currently?
p. 7
“Normally, in the export market, we are always sold for about 3 months.”
Neeraj Jain, page 7 of the filed PDF · View the filing
Yes, confirmed.
Answered by Neeraj Jain
Asked by Prerna Jhunjhunwala: Will April-May price improvements show up in Q2?
p. 7
“Yes, that's true.”
Neeraj Jain, page 7 of the filed PDF · View the filing
Margins will moderate but management does not expect them to fall back to the low levels of the past two years.
Answered by Neeraj Jain
Asked by Awanish Chandra: Will the strong margins continue after Q2 or moderate?
p. 9
“No, surely, it will moderate. So there's no doubt about the same.”
Neeraj Jain, page 9 of the filed PDF · View the filing
Management declined to share the figure.
Answered by Neeraj Jain
Asked by Awanish Chandra: What is the current cotton inventory level?
p. 9
“Sorry, that's something we don't share.”
Neeraj Jain, page 9 of the filed PDF · View the filing
Peak revenue estimated at close to INR300 crores.
Answered by Neeraj Jain
Asked by Shirish Pardeshi: What is the peak revenue potential of the expanded 4.5 million garment capacity?
p. 12
“Close to about INR300 crores would be […].”
Neeraj Jain, page 12 of the filed PDF · View the filing
About one-third of export yarn, roughly 7-8% of total production, goes to China.
Answered by Neeraj Jain
Asked by Shirish Pardeshi: What proportion of yarn exports go to China?
p. 12
“So one-third, 33% of total, which means about 7% to 8% of my total production goes to China.”
Neeraj Jain, page 12 of the filed PDF · View the filing
Spread was around USD0.90 per kg based on spot cotton and spot yarn prices.
Answered by Neeraj Jain
Asked by Falguni Dutta: What was the cotton yarn spread in Q1?
p. 14
“In this period, it was ranging about USD0.90 per kg of yarn.”
Neeraj Jain, page 14 of the filed PDF · View the filing
Management attributed it to China's reduced cotton sowing, rising domestic costs, and a strategy of importing yarn rather than producing it locally to avoid Xinjiang cotton compliance risk.
Answered by Neeraj Jain
Asked by Prerna Jhunjhunwala: Why did China resume buying yarn from India after a period of reduced purchases?
p. 15
“Now the cotton prices are there with a $1 plus and the rest of the world, the cotton prices are in the range of about $0.89, $0.90, 10% to 12% increase for them is a huge cost.”
Neeraj Jain, page 15 of the filed PDF · View the filing
Management said China's net spindle count has fallen sharply and other countries like Indonesia, Vietnam, Turkey and Bangladesh are not adding capacity, leaving India and Egypt as the main growth areas.
Answered by Neeraj Jain
Asked by Prerna Jhunjhunwala: Is spindle addition happening elsewhere in the world besides India?
p. 16
“So the only one country where some small increase may happen is that Egypt or India as of now.”
Neeraj Jain, page 16 of the filed PDF · View the filing
Management said mechanical recycling technology is mature and up to 30-40% recycled fiber blending with virgin fiber is already being done regularly.
Answered by Neeraj Jain
Asked by Monish Ghodke: What is the opportunity in recycled cotton yarn technology and economics?
p. 17
“And today, up to 30%, 40% recycled fiber with the virgin fibers on the ring also is possible. We are doing it very regularly.”
Neeraj Jain, page 17 of the filed PDF · View the filing
Risks flagged
U.S. tariff issue caused a missed sampling season, keeping U.S. orders from coming to India
p. 3
“during last year, because of the U.S. tariff, there's been an issue. We missed the sampling of a particular season.”
Neeraj Jain, page 3 of the filed PDF · View the filing
El Nino-related rain variability creating uncertainty on Indian cotton crop quality and size
p. 4
“So there could be a reduction in the overall rains. Also, the variation in the areas has been huge.”
Neeraj Jain, page 4 of the filed PDF · View the filing
Drought conditions in West Texas, USA, could affect crop availability
p. 4
“So the USA West Texas is still talking of drought conditions in that area, which means the crop over there can also be effective.”
Neeraj Jain, page 4 of the filed PDF · View the filing
Lag in passing on rising yarn prices to fabric customers pressures fabric division margins
p. 6
“in the fabric side also, there's always a lag when we are -- when we can pass on the yarn prices to the customers.”
Neeraj Jain, page 6 of the filed PDF · View the filing
Trading margin gains from low-cost inventory will diminish as inventory is used up
p. 9
“But these kind of numbers, whosoever has whatever inventory they have at lower prices, that advantage will be there.”
Neeraj Jain, page 9 of the filed PDF · View the filing
Historical dependence on Indian cotton prices being misaligned with world prices hurt competitiveness
p. 16
“our raw material was much more expensive compared to the rest of the world”
Neeraj Jain, page 16 of the filed PDF · View the filing
Uncertainty over Dhar land and power availability could delay project start
p. 13
“we are expecting the power to be available not before June '27. So we don't want to take it because it can further get delayed.”
Neeraj Jain, page 13 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.