BSE:502986

Stock Analysis Report

Executive Summary

Vardhman Textiles Limited, together with its subsidiaries, manufactures and sells textiles in India.

Rewards

Trading at 18.3% below its fair value

Earnings are forecast to grow 11.61% per year

Pays a high and reliable dividend of 1.65%

Risk Analysis

No risks detected for 502986 from our risk checks.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Vardhman Textiles's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 502986 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.3%

502986

-0.5%

IN Luxury

-1.5%

IN Market


1 Year Return

9.6%

502986

18.2%

IN Luxury

10.7%

IN Market

Return vs Industry: 502986 underperformed the Indian Luxury industry which returned 18.2% over the past year.

Return vs Market: 502986 underperformed the Indian Market which returned 10.7% over the past year.


Shareholder returns

502986IndustryMarket
7 Day4.3%-0.5%-1.5%
30 Day1.9%3.0%-2.7%
90 Day20.0%9.2%1.3%
1 Year11.6%9.6%19.0%18.2%12.7%10.7%
3 Year-17.1%-20.8%52.2%48.8%22.0%15.1%
5 Year128.8%111.7%106.9%100.1%34.5%22.0%

Price Volatility Vs. Market

How volatile is Vardhman Textiles's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Vardhman Textiles undervalued compared to its fair value and its price relative to the market?

18.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 502986 (₹1057.95) is trading below our estimate of fair value (₹1294.83)

Significantly Below Fair Value: 502986 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 502986 is good value based on its PE Ratio (9.8x) compared to the Luxury industry average (11.2x).

PE vs Market: 502986 is good value based on its PE Ratio (9.8x) compared to the Indian market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: 502986 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: 502986 is overvalued based on its PB Ratio (1x) compared to the IN Luxury industry average (0.5x).


Next Steps

Future Growth

How is Vardhman Textiles forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

11.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 502986's forecast earnings growth (11.6% per year) is above the savings rate (6.5%).

Earnings vs Market: 502986's earnings (11.6% per year) are forecast to grow slower than the Indian market (20.6% per year).

High Growth Earnings: 502986's earnings are forecast to grow, but not significantly.

Revenue vs Market: 502986's revenue (4.2% per year) is forecast to grow slower than the Indian market (9% per year).

High Growth Revenue: 502986's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 502986's Return on Equity is forecast to be low in 3 years time (10.6%).


Next Steps

Past Performance

How has Vardhman Textiles performed over the past 5 years?

6.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 502986 has high quality earnings.

Growing Profit Margin: 502986's current net profit margins (8.9%) are lower than last year (10.8%).


Past Earnings Growth Analysis

Earnings Trend: 502986's earnings have grown by 6.5% per year over the past 5 years.

Accelerating Growth: 502986's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 502986 had negative earnings growth (-14.5%) over the past year, making it difficult to compare to the Luxury industry average (5.6%).


Return on Equity

High ROE: 502986's Return on Equity (10.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Vardhman Textiles's financial position?


Financial Position Analysis

Short Term Liabilities: 502986's short term assets (₹44.2B) exceed its short term liabilities (₹14.5B).

Long Term Liabilities: 502986's short term assets (₹44.2B) exceed its long term liabilities (₹15.2B).


Debt to Equity History and Analysis

Debt Level: 502986's debt to equity ratio (25.4%) is considered satisfactory.

Reducing Debt: 502986's debt to equity ratio has reduced from 75.2% to 25.4% over the past 5 years.

Debt Coverage: 502986's debt is well covered by operating cash flow (50.1%).

Interest Coverage: 502986's interest payments on its debt are well covered by EBIT (7.5x coverage).


Balance Sheet

Inventory Level: 502986 has a high level of physical assets or inventory.

Debt Coverage by Assets: 502986's debt is covered by short term assets (assets are 3x debt).


Next Steps

Dividend

What is Vardhman Textiles's current dividend yield, its reliability and sustainability?

1.65%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%0.6%markettop25%2.6%industryaverage0.6%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: 502986's dividend (1.65%) is higher than the bottom 25% of dividend payers in the Indian market (0.6%).

High Dividend: 502986's dividend (1.65%) is low compared to the top 25% of dividend payers in the Indian market (2.58%).


Stability and Growth of Payments

Stable Dividend: 502986's dividends per share have been stable in the past 10 years.

Growing Dividend: 502986's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.2%), 502986's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 502986's dividends in 3 years are forecast to be well covered by earnings (18.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.4yrs

Average management tenure


CEO

Shri Oswal (77yo)

14.7yrs

Tenure

₹188,324,000

Compensation

Mr. Shri Paul Oswal, M.Com. has been the Executive Chairman of Vardhman Textiles Limited since June 1, 2005 and its Managing Director since June 17, 2005. Mr. Oswal has been the Managing Director of Vardhm ...


CEO Compensation Analysis

Compensation vs Market: Shri's total compensation ($USD2.63M) is above average for companies of similar size in the Indian market ($USD387.20K).

Compensation vs Earnings: Shri's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Shri Oswal
Executive Chairman & MD14.7yrs₹188.32m1.1% 653.3m
Suchita Jain
Vice Chairperson & Joint MD1yrs₹18.53m0.42% 252.1m
Neeraj Jain
Joint MD9.9yrs₹17.86m0.0076% 4.5m
I. M. J. Sidhu
President & Director In-charge0yrsno data0.0074% 4.4m
Rajeev Thapar
Chief Financial Officer0yrsno data0.00071% 421.3k
Bal Choudhary
Director of Operations0yrsno data0.010% 6.2m
Sanjay Gupta
Compliance Officer & Company Secretary2.7yrsno datano data
Dinesh Sindwani
Director of Corporate Services0yrsno datano data
Mukesh Bansal
Senior Vice President of Fabric Marketing0yrsno data0.0035% 2.1m
T. Gupta
Chief General Manager of Operations0yrsno data0.0021% 1.2m

4.4yrs

Average Tenure

58.5yo

Average Age

Experienced Management: 502986's management team is considered experienced (4.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Shri Oswal
Executive Chairman & MD14.7yrs₹188.32m1.1% 653.3m
Suchita Jain
Vice Chairperson & Joint MD1yrs₹18.53m0.42% 252.1m
Neeraj Jain
Joint MD9.9yrs₹17.86m0.0076% 4.5m
Rajendra Malla
Independent Director4.5yrs₹275.00kno data
Darshan Sharma
Non-Executive Non-Independent Director34.5yrsno data0.011% 6.4m
Sachit Jain
Non-Executive Director25.7yrs₹5.86mno data
Prafull Shah
Non-Executive Independent Director 39.6yrs₹515.00kno data
Subash Bijlani
Non-Executive Independent Director 14.9yrs₹235.00kno data
Ashok Kundra
Non-Executive Independent Director11.1yrs₹665.00kno data
Devendra Jain
Independent Additional Director5.5yrs₹395.00kno data

12.9yrs

Average Tenure

73.5yo

Average Age

Experienced Board: 502986's board of directors are seasoned and experienced ( 12.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Vardhman Textiles Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Vardhman Textiles Limited
  • Ticker: 502986
  • Exchange: BSE
  • Founded: 1965
  • Industry: Textiles
  • Sector: Consumer Durables
  • Market Cap: ₹59.336b
  • Shares outstanding: 57.52m
  • Website: https://www.vardhman.com

Number of Employees


Location

  • Vardhman Textiles Limited
  • Chandigarh Road
  • Ludhiana
  • Punjab
  • 141010
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
502986BSE (Mumbai Stock Exchange)YesEquity SharesININRJul 2001
VTLNSEI (National Stock Exchange of India)YesEquity SharesININRJul 2001

Biography

Vardhman Textiles Limited, together with its subsidiaries, manufactures and sells textiles in India. It operates in two segments, Textiles and Fibre. The company manufactures yarns, fabrics, fibers, threads, and garments. It offers specialized greige and dyed yarns in cotton, polyester, acrylic, and various blends; and value added products, such as organic cotton, melange, core spun yarns, ultra yarns, gassed mercerized, super fine yarns, slub and cellulose yarns, and fancy yarns for hand knitting. The company also exports its products. In addition, it engages in lending and investing activities; and manufacturing steel products. The company was formerly known as Mahavir Spinning Mills Limited and changed its name to Vardhman Textiles Limited in September 2006. Vardhman Textiles Limited was founded in 1965 and is headquartered in Ludhiana, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 12:40
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.