Vardhman Textiles Q1 FY26 Earnings Call: Cotton Price Concerns & US Tariff Impact
The announcement discusses challenges in the spinning industry due to cotton prices and tariffs, which could affect profitability, but also mentions capacity expansions and diversification efforts that could mitigate these challenges.
The announcement discusses both positive aspects (stable sales, capacity expansions) and negative aspects (challenges in the spinning industry, tariff uncertainties).
* Vardhman Textiles held its Q1 FY26 earnings conference call on July 22, 2025, discussing the results. * The operational performance was slightly better than the previous quarter, excluding extraordinary items. * The Indian spinning industry faces challenges due to high cotton prices, with Indian cotton trading at a premium to international cotton. * Indian mills have more than doubled their cotton imports due to the high cost of domestic cotton, further disadvantaged by an 11% import duty. * New U.S. tariffs on textile imports have caused volatility and confusion, leading to a slowdown in new order placements from the US market. * Yarn and fabric sales remained broadly in line with the corresponding quarter last year. * Fabric expansion is progressing as per schedule and is expected to contribute meaningfully from quarter three onwards. * Capacity expansion in the mechanical recycling plant, ReNova, has successfully begun operations in July, along with expanded capacity of 14,000 spindles in Melange yarn. * The company's spinning capacity is close to 1.3 million spindles, with debottlenecking efforts expected to increase production by 6% to 7%. * Fabric processing capacity is currently at 145 lakh meters per month and is expected to increase to about 210 lakh meters per month in the next 3 to 4 years. * Yarn prices are approximately USD3, with an international spread for cotton yarn in the range of about USD0.85 to USD0.90. However, the Indian spinner margin is closer to $0.70 due to higher cotton costs. * The company's total export is almost 30% of its total capacity. * Fabric exports to the U.S. account for approximately 40% to 45% of the total fabric business. * Management indicated that overall company margins will likely improve as investments in the textile part of the business increase.
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Vardhman Textiles Limited filed this with the NSE as a statutory disclosure, categorised under results. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by Vardhman Textiles Limited. Read the original for the full detail.