Synopsis:
Textile stock jumped 11% on improved Q2 margins, with sales up 4% QoQ and EBITDA margin at 13.5%. Yarn drives 66% of revenue, and Rs. 3,535 crore Capex is planned for capacity expansion, modernisation, and green initiatives.
This company is engaged in the business of manufacturing Yarn, Fabric, Acrylic Fiber and Garments developed as a business conglomerate with a presence in India and in countries across the globe is now in the spotlight after announcing total capex of Rs. 3,535 crores.
With market capitalization of Rs. 12,502 cr, the shares of Vardhman Textiles Ltd are closed at Rs. 437.40 per share, gained 11% in today’s market session, making a high of Rs. 454.24, from its previous close of Rs. 408.25 per share.
Further, Textile stocks rallied sharply today following encouraging developments in the ongoing India-US trade negotiations, with expectations rising that a bilateral agreement may soon be reached to significantly lower tariffs on Indian textile exports to the US.
Key political statements by President Donald Trump, who mentioned productive talks with Prime Minister Narendra Modi and indicated solid progress towards a deal that will favour textile stocks.
Quarter-on-Quarter (QoQ) Performance
For the quarter ended Q2FY26, Vardhman Textile reported a mixed sequential performance. Sales increased modestly by 4% QoQ, rising from Rs. 2,386 crore in Q1FY26 to Rs. 2,480 crore.
EBITDA grew slightly by 2% QoQ, moving from Rs. 326 crore to Rs. 334 crore, reflecting stable operational efficiency. Net Profit declined by 10% QoQ, from Rs. 208 crore to Rs. 188 crore, with EPS falling from Rs. 7.16 to Rs. 6.47.
Year-on-Year (YoY) Performance
Compared to the same quarter last year, Vardhman Textile saw sales decline by 1% YoY, from Rs. 2,502 crore in Q2FY25 to Rs. 2,480 crore. EBITDA improved by 6% YoY, increasing from Rs. 315 crore to Rs. 334 crore, supported by better margins.
Net Profit dropped by 5% YoY, from Rs. 197 crore to Rs. 188 crore, resulting in a 5% decline in EPS, from Rs. 6.81 to Rs. 6.47. EBITDA margin of 13.5%, up from 12.6% a year ago.
Vardhman’s revenue split for Q2 FY26 shows that yarn remains the company’s primary revenue driver, contributing 66% of total income, while fabric accounts for the remaining 34%.
From a geographical perspective, domestic sales form a slightly larger share at 55%, compared to exports, which contribute 45%. This indicates a balanced mix of local and international demand, with a stronger emphasis on yarn production within the company’s overall product portfolio.
Status of Expansion Plans
As of Q2FY26, the company has announced a total capital expenditure (Capex) of Rs. 3,535 crore focused on multiple expansion and upgrade projects. Yarn capacity expansion has progressed with about 17,000 spindles completed and an open-end project of 6,624 rotors to be started. Processed fabric capacity is set to increase by 3.1 crore meters annually, with completion expected by the second half of FY26.
Vardhman Performance Fabric (Synthetic Woven) will add 1.8 crore meters of capacity annually, also targeted for completion by H2 FY26. Modernisation, automation, and technological upgrades are underway in phases, with expected completion by H2 FY26, while the green Capex initiatives are planned for phased implementation and expected to be completed by FY27.
Written by Manideep Appana
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