Vardhman margin rises as revenue growth outpaces cost growth
Consolidated margin reached 19.58%, while net profit rose +91.07% year on year despite higher interest costs.
Filed 06 Nov 2026, 12:08 IST · Vardhman Textiles Ltd (VTL)
Key takeaways
- Consolidated operating margin rose 6.10 percentage points year on year to 19.58% as revenue grew +15.55% while expenses grew +7.40%.
- Net profit growth was +91.07% year on year to Rs 358.76 cr, though other income contributed 14.75% of pre-tax profit.
- Operating margin increased 2.06 percentage points sequentially to 19.58%, marking a third consecutive quarterly rise.
Price around the results
Revenue growth outpaced expenses in Q2FY27
On a consolidated basis, revenue grew +6.01% sequentially and +15.55% year on year, while expenses rose only +3.37% and +7.40%, respectively. That cost-to-revenue gap lifted operating profit by +18.48% sequentially and +67.78% year on year. The presentation reported yarn production of 71,105 MT, up 1.6% year on year, while processed fabric sales fell 2.5% to 392 lakh metres.
Margin expansion was not tax-led
Operating margin improved 2.06 percentage points sequentially and 6.10 percentage points year on year because revenue growth exceeded expense growth. Interest costs increased +11.41% sequentially and +25.34% year on year, adding a counterweight to operating gains. The tax rate changed only 0.06 percentage points sequentially and 0.29 percentage points year on year, while other income accounted for 14.75% of pre-tax profit.
Third consecutive quarterly margin increase
Operating margin has risen from 11.35% in Q3FY26 to 11.77%, 17.52% and now 19.58% over the next three quarters. Vardhman’s 19.58% margin was 8.04 percentage points above the 11.54% median for the 271 Consumer Discretionary peers that had reported.
Management flags capex and operating priorities
Management said total announced capex is Rs 3,660 cr. The company told investors it targets a 50% reduction in waste sent to landfill and a 30% reduction in freshwater consumption by 2030. The quarter’s operating data showed slightly higher yarn production alongside lower processed fabric sales year on year.
Prior result reactions have been evenly split
Across the eight prior result-related sessions, the stock rose four times and fell four times. The median absolute move was 3.22%, with the six most recent moves ranging from -4.36% to +7.65%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,866 cr | ₹2,703 cr | +6.01% | +15.55% |
| Other income | ₹70 cr | ₹94 cr | -25.06% | +43.45% |
| Expenses | ₹2,305 cr | ₹2,229 cr | +3.37% | +7.40% |
| Operating profit | ₹561 cr | ₹474 cr | +18.48% | +67.78% |
| Operating margin (%) | 19.58% | 17.52% | — | — |
| Interest | ₹26 cr | ₹23 cr | +11.41% | +25.34% |
| Depreciation | ₹129 cr | ₹126 cr | +1.80% | +12.63% |
| Profit before tax | ₹477 cr | ₹418 cr | +14.14% | +91.80% |
| Tax | ₹118 cr | ₹104 cr | +14.39% | +94.02% |
| Net profit | ₹359 cr | ₹315 cr | +14.05% | +91.07% |
| EPS (₹) | ₹12.54 | ₹10.88 | +15.26% | +90.87% |
Operating margin of 19.58% compares with a Consumer Discretionary sector median of 11.54% across 271 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Yarn production was 71,105 MT in Q2 FY27, up 1.6% year on year.
- Processed fabric sales were 392 lakh metres in Q2 FY27, down 2.5% year on year.
Guidance & outlook
- The company targets a 50% reduction in waste sent to landfill by 2030.
- The company targets a 30% reduction in freshwater consumption by 2030.
Expansion
- Total announced capex is ₹3,660 crore.
What to watch
- Whether consolidated operating margin holds above 19.58%.
- Whether revenue growth remains ahead of expense growth after the +15.55% versus +7.40% year-on-year gap.
- Processed fabric sales relative to 392 lakh metres and yarn production relative to 71,105 MT.