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Vardhman Textiles Ltd. Stock Analysis

Small Cap
Evaluated by 1389 users | BSE: 502986 | NSE: VTL |
Textile
Vardhman Textiles, incorporated in 1973, is one of the pioneers in textile industry with operations in the segments of yarn, sewing thread, steel, and fabric. Formerly known as Mahavir Spinning Mills, it is a part of Vardhman Group managed by Paul Oswal. In 1975, Vardhman Textiles’s...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Vardhman Textiles Ltd. has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 12.1%4.57%9.06%13.74%6.67%12.42%11.68%8.35%10.11%8.15%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 3,6073,9184,1605,1715,7425,6135,6905,8516,4156,325
Y-o-Y Gr. Rt.-8.6%6.2%24.3%11%-2.2%1.4%2.8%9.6%-1.4%
Adjusted EPS (Rs.) 71.8314.6151.46103.7244.41102.87114.5981.23112.2692.58
Y-o-Y Gr. Rt.--79.7%252.2%101.6%-57.2%131.6%11.4%-29.1%38.2%-17.5%
Book Value per Share (Rs.) 301.37313.58357.66447.48484.41594.64712.65804.6908.62982.53
Adjusted Net Profit 45793328660283638641467645533
Net Op. Cash Flow (Rs. Cr.) -24.19302697061,2118691,28990.1447851
Debt to Cash Flow from Ops -117.42.8311.244.572.072.991.7125.355.012.58
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Vardhman Textiles Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 6.4%2%3.6%-1.4%
Adjusted EPS 2.9%15.8%-6.9%-17.5%
Book Value per Share 1415.211.38.1
Share Price 15.4% -0% -17.5% -19.5%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 27.14.7515.3325.769.5318.8516.710.8313.079.77
Operating Profit Margin (%) 25.0212.5820.3925.0616.419.7419.8814.6717.6414.08
Net Profit Margin (%) 12.682.377.8712.774.9211.3711.267.9710.068.42
Debt to Equity 1.481.321.331.130.810.70.550.490.430.39
Working Capital Days 264271270263252225187193209226
Cash Conversion Cycle 172175168161148149145146156171
Entity Percentage Holding
Promoters 62.24%
Institutions 28.20%
Non-Institutions 9.56%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Vardhman Textiles Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Vardhman Textiles Ltd. is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Vardhman Textiles Ltd.'s performance infers:

Vardhman Textiles Ltd. earnings have grown by 15.8%, whereas share price has appreciated -0% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Vardhman Textiles Ltd. share prices over the last 10 years. Here is what we found out:

Vardhman Textiles Ltd. share price has appreciated 8.1% annually over the past ten years.

Vardhman Textiles, incorporated in 1973, is one of the pioneers in textile industry with operations in the segments of yarn, sewing thread, steel, and fabric. Formerly known as Mahavir Spinning Mills, it is a part of Vardhman Group managed by Paul Oswal.

In 1975, Vardhman Textiles’s first plant was commissioned with 25,088 spindles in Hoshiarpur, Punjab. In 1977-78, the company set up a 25,000-spindle textile mill at Malerkotla in Sanazur, Punjab. In 1992-93, a 100% Export Oriented

Vardhman Textiles, incorporated in 1973, is one of the pioneers in textile industry with operations in the segments of yarn, sewing thread, steel, and fabric. Formerly known as Mahavir Spinning Mills, it is a part of Vardhman Group managed by Paul Oswal.

In 1975, Vardhman Textiles’s first plant was commissioned with 25,088 spindles in Hoshiarpur, Punjab. In 1977-78, the company set up a 25,000-spindle textile mill at Malerkotla in Sanazur, Punjab. In 1992-93, a 100% Export Oriented Unit (EOU) was commissioned by Vardhman Textiles’s at Mandideep. Both the Malerkotla mill and EOU unit was awarded the ISO 9002/BIS 14002 by Bureau of Indian Standards (BIS).

In March 1995, its gassed and mercerized dyed yarn project at Hoshiarpur commenced production.In order to set up 100% EOU located at Baddi, Himachal Pradesh, the company formed joint venture with Marubeni Corporation and Toho Rayon of Japan. For this company established Vardhman Acrylics and started commercial production in September 1996.

In 1998-99 company set up its 3rd 100% EOU at Mandideep with an installed production capacity of 25000 spindles.

Company set up unit-II at Ludhiana in order to expand its sewing thread capacity. This unit had an installed capacity of 5 TPD. Company entered an agreement with Amercian & Effird Inc., USA to manufacture superior sewing thread.

Much later in 2004 the textile business of Vardhman Spinning and General Mills was merged with Vardhman Textiles. The company added new units of Looms and Rotors with a installed capacity of 264 Nos and 528 Nos respectively

Companies like VMT Spinning Company (VMT), Vardhman Threads (VTL) and Vardhman Yarns & Threads and Vardhman Acrylics are the subsidiaries of Vardhman Textiles. Vardhman Textiles is promoted by Ludhiana based Vardhman Group, a major textile business house in India.

Company has received ISO 9002/ ISO 14002 certification for its quality management.

Vardhman Textiles, exports its products to more than 25 countries and has a strong presence in markets like the EEC, USA, Canada, China, Japan, Korea, Mexico, Brazil and Mauritius, Middle East.

Vardhman Group (Parent Company)Vardhman Group was set up in the year 1965 at Ludhiana, Northern India. The group has business interest in area of Yarns, Fabrics, Sewing Threads, Fibre and Alloy Steel. Vardhman group is one of the largest spinning group of the country with a spindlage of over 5,50,000.

The group has 12 production plants located in the states of Punjab, Himachal Pradesh and Madhya Pradesh. Currently the group has manufacturing capacity of approximately 25 metric tonne/per day of sewing thread in its plant at Hoshiarpur, Ludhiana, Baddi and Perundurai. Currently the group employs 20,000 people.Future ProspectsVardhman Textiles is undertaking Research and Development activities in order to develop of new products and for improvement in the production process and quality of products.

PRODUCT

Yarn: Under this segment, the company manufactures wide range of yarn such as Grey Cotton, Grey Acrylic, Crayons, Hank Dyed Acrylic, Vardhman Knitting, Gassed Mercerised Cotton and many more.Company’s annual manufacturing capacity of yarn is to 98,736 MT.

Fabrics- Company manufactures fabric for shirting and bottom weights. It produces fabrics of various types viz. 100% Cotton, Polyester cotton, Chief Value Cotton and Cotton Stretch. Company’s fabric manufacturing capacity is  30 million meters per annum

Sewing Threads- Company manufactures wide range of threads such as cotton, polyster, core spun (polyester cotton/ polyester polyester), trilobal embroidery thread, bonded nylon and lubricated nylon thread including specialized threads like button fusing, bead fusing and anti wicking, button shanking, indigo dyed and so on.

Steel- Under this, company has an installed capacity of 1,00,000 Metric tonnes per annum.

Awards

The Company was awarded Golden trophy by Textile Export Promotion Council (Merchant Export Category for Fabrics) for the various export performance in the year 1993-94.

Vardhman Textiles received the award of merit from the Government of India in the year 1994-95 and 1995-96.

2010-11 - Textile Export Promotion Council 2010-11

2011-12 -Textile Export Promotion Council 2011-12"

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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