Vardhman Textiles Limited has released the transcript of its earnings conference call held on January 21, 2026, to discuss the company's performance for the third quarter of fiscal year 2026 (3Q FY26). During the call, management noted that the overall performance for the quarter was broadly in line with the corresponding period last year. The EBITDA margin for the quarter stood at approximately 15%, a slight decrease from the previous quarter's 16% and a year-on-year decline from 17% on a year-to-date basis. The operating environment was characterized by cost volatility, demand disruptions, and global trade uncertainties. Capacity utilization for yarn was around 95%, and for fabric, it was approximately 89-90%. The company highlighted the impact of elevated Indian cotton prices, which were trading around $0.75-$0.78 per pound in Q3 and rose to $0.79 in January 2026, making Indian cotton structurally more expensive than global benchmarks. The Cotton Corporation of India (CCI) has been a significant buyer, absorbing a large portion of arrivals and constraining open market availability, which supports higher prices. The reinstatement of an 11% import duty on January 1st has put Indian mills at a disadvantage compared to countries like Bangladesh and Vietnam, which benefit from duty-free imports. The Yarn business faced pressure due to tariff-related disruptions and excess global capacity, although domestic demand remained soft while exports saw selective improvement. Yarn prices improved by approximately $0.15 per kg in the last month but did not fully offset elevated cotton costs. The Fabric business operated in a challenging external environment, with U.S. buyers adopting a cautious approach. Key strategic milestones included the commissioning of Vardhman Performance Fabrics for performance wear and fabric expansion at Budhni. The company is also focusing on green initiatives, with plans to increase green power usage from 9% to about 49-50% by FY27. Management discussed ongoing efforts to mitigate challenges through disciplined capacity utilization, selective price recovery, increasing value-added yarns, and diversifying into non-U.S. markets. The company is also considering doubling its garmenting capacity.
