Reason for Vardhman Textiles' sudden dynamism

Vardhman Textiles has witnessed a nearly 12 per cent rise in its stock prices in last 4 trading sessions ahead of the results. This textile giant reported better than expected rise in its net profit despite of flat to negative revenues. Recently the company also announced a stake sale of 40 per cent in joint venture Vardhman Yarns and Threads to partner A&E Global.

Considering quarter on quarter performance, the Company’s consolidated Revenues have come in at Rs 1651.08 crores in this quarter as against Rs 1710.1 crores in Q3FY16, a decrease of 3.5 per cent. However, Company’s EBITDA has increased by 9 per cent to Rs. 382.37 crores as against Rs. 350.92 crores. Net profits too have risen to Rs 159.44 crores as against Rs 147.95 crores, an increase of 7.8 per cent.

The Year on Year (YOY) statistics are showing enhanced net profits. Company’s consolidated Revenues remained flat from Rs. 1660.38 crores. EBIDTA of the company has risen by 8.6 per cent from Rs 352.19 crore YOY. Net profit has (PAT) witnessed an increase of 45.9 per cent from Rs 109.27 crore.

On yearly basis, company’s consolidated Revenues have seen a decrease of 2.2 per cent to Rs. 6636.92 crores for the year ended March 2016 as compared to Rs 6785.96 crores for FY15. EBITDA has surged by Rs. 1401.8 crores for FY16 as compared to Rs 1284.01 crores in FY15, an increase of 9.2 per cent. Net profit too has grown from Rs 400.21 crores in FY15 to Rs 578.62 crores in FY16, an increase of 44.6 per cent.

Stock hit its 52 week high yesterday and closed at Rs 1001.95 with an increase of 8.3 per cent.