VTL - Investment Analysis

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

Investment Rating: 3.2

🧵 Fundamental Analysis of Vardhman Textiles Ltd (VTL)

✅ Strengths

Attractive Valuation

P/E: 15.6 vs Industry PE of 27.8 — undervalued relative to peers

Book Value: ₹342 vs Price: ₹460 — ~1.34x book, reasonable

EPS: ₹29.5 — solid earnings base

Strong Financial Health

Debt-to-Equity: 0.13 — low leverage, financially sound

ROCE: 11.2%, ROE: 9.3% — moderate but stable returns

FII Interest

FII Hold ↑ 0.28% — foreign investors increasing exposure

⚠️ Concerns

Earnings Pressure

PAT Qtr: ₹207 Cr vs ₹237 Cr — sequential decline

Qtr Profit Var: -13.1% — signs of margin pressure

PEG Ratio: -0.92 — negative PEG suggests unreliable growth outlook

Technical Weakness

RSI: 33.3 — approaching oversold zone

MACD: -4.85 — bearish momentum

Price below both DMA 50 and DMA 200 — short-term downtrend

Dividend Yield: 0.87% — modest, not compelling for income investors

Volume Drop — current volume below 1-week average

📉 Ideal Entry Price Zone

Entry Zone: ₹420–₹440

Near technical support and RSI reversal zone

Offers better valuation comfort and downside protection

🧭 Long-Term Investment Outlook

VTL is a moderate candidate for long-term investment, particularly for value-oriented investors. While its valuation and financial health are attractive, growth concerns and technical weakness suggest caution.

Holding Period: 2–3 years

Reassess if ROE improves to 12%+ and PEG turns positive

Monitor global textile demand and margin recovery

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹500–₹520

Near resistance and valuation ceiling

Full Exit

If ROE drops below 8% for 2+ quarters

If PEG remains negative and earnings continue to decline

If price breaks below ₹400 and fails to recover

Reinvest: On dips near ₹420 if fundamentals stabilize

Would you like a comparison with textile peers like KPR Mill, Trident, or Welspun India to identify stronger long-term opportunities?

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