VTL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Here’s an in-depth look at Vardhman Textiles Ltd. (VTL), one of India’s leading integrated textile players, with a strong operational backbone but facing moderate headwinds.

🧾 Core Financial Strength

Profitability

ROE: 9.3%, ROCE: 11.2% — reasonably efficient, though not industry-leading

EPS: ₹29.5 — solid earnings; supports valuation in current price range

Quarterly PAT Drop: -13.1% — signals margin or volume pressures recently

Balance Sheet Health

Debt-to-Equity: 0.13 — conservative leverage, implies financial stability

Dividend Yield: 0.87% — modest; adds passive income but not high-yield

📊 Valuation Overview

Metric Value Interpretation

P/E Ratio 15.6 Below industry average (27.8) — appears undervalued

P/B Ratio ~1.34 Attractive, trading close to book value

PEG Ratio -0.92 Negative — concerning, suggests contraction or inconsistent growth

🧵 Business Model & Competitive Position

Core Operations: Spinning, weaving, and knitting across cotton and blended fabrics

Strengths

Export-oriented with a global customer base

Vertical integration enables cost controls

Experienced management and long-standing industry presence

Challenges

High dependency on raw material prices (especially cotton)

Cyclical demand and reliance on global apparel trends

Recent dip in PAT and volume may reflect global textile slowdown

📉 Technical & Market Indicators

RSI: 33.3 — approaching oversold territory; may invite bottom-fishing interest

MACD: -4.85 — bearish divergence; trend weakness continues

Price vs. DMA

Current Price < 50-DMA (₹485) and < 200-DMA (₹470) — short-term weakness confirmed

Downward momentum visible but stabilizing near support zones

🎯 Entry Zone & Holding Strategy

Recommended Entry: ₹440–₹455 — technically sound zone near 200-DMA and oversold levels

Target Range (12–15 months): ₹525–₹550 if global textile cycle turns favorable

Investor Fit

Ideal for value investors with medium-risk appetite

Suited for long-term holders seeking diversified exposure within the industrials/textile theme

Would you like me to run a comparison model against Trident, Welspun or KPR Mill to visualize margin trajectories and export responsiveness? Or maybe build a price-to-earnings growth forecast based on historical capex efficiency? Let’s tailor your insight. 🧶📈

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