Vardhman Textiles reported stable sales for Q2 FY26 at INR2,468 crores. The company experienced moderated profitability, with an EBITDA margin of 15.5%, as raw material costs were high. Despite market disruptions, the fabric division sustained 90% capacity utilization. An expansion road map is progressing well, with a new performance fabric plant expected to be commissioned within the quarter. The company anticipates market stabilization by Q4 FY26.
Financial Performance Overview
Vardhman Textiles reported stable sales for the second quarter of FY26, with revenues reaching INR2,468 crores, compared to INR2,565 crores in the previous year. Profitability was moderately affected due to higher operating costs, resulting in an EBITDA margin of 15.5%.
Operational Resilience and Expansion
Despite significant global headwinds, including elevated US tariffs and excess spinning capacity, the company’s yarn and fabric businesses sustained robust performance. The fabric division maintained 90% capacity utilization. An expansion road map is progressing, with the Vardhman performance fabric plant expected to be commissioned within Q3 FY26 and capacity utilization anticipated to reach 20%-30% during Q4 FY26. A line expansion at the MP location is also underway, projected to increase overall production capacity by about 30%.
Raw Material and Market Dynamics
The Indian spinning industry is facing challenges due to persistently high domestic cotton prices. The government’s relaxation of the 11% import duty provides some relief. Yarn prices declined by 2%-3% in the past month, reflecting surplus spinning capacity. The company hopes for further market stabilization by Q4 FY26. Diversified portfolio spanning domestic and non-US export markets has provided critical stability with spinning utilizations in the range of 90% to 95%.
Tariff and Export Strategy
The US 50% import duty has prompted brands to explore lower tariff sourcing destinations. In response, Vardhman Textiles is prioritizing diversification, innovation, deep customer engagement, strategic partnerships, and operational agility, and has activated a comprehensive mitigation framework.
Acrylic Business
The acrylic demand in India has been decreasing. Vardhman Acrylics is running at 100% capacity, but there is pressure on margins. Overall acrylic demand has been declining due to the increasing price gap between acrylic and polyester.
Source: BSE
