For the next year Vardhaman Textiles expects profits to be within the range of 18 to 22 per cent. Last year was an abnormally profitable year for the company. The EBITDA margin (earnings before interest, taxes, depreciation, and amortization) was 25.7.

The group has about Rs 700 crores of repayment coming up, so the first objective is to clear those repayments. It’s also open to a good acquisition opportunity. The first of its capex plans has been announced. About Rs 600 crores is going into its fabric business which will increase its capacity by about 45 million meters over the next three years.

The last two quarters were a little tough because of sliding cotton prices, which was due to the new cotton crop coming in. That process has stopped and now onwards cotton prices are at normal levels. The latest book value of the company is Rs 447.48 per share. The net debt-equity of Vardhaman Textiles on a consolidated basis would be in the range of 0.5-0.7.

Since every year good quality cotton stops becoming available May onwards, the company does cotton procurement up to next April. Vardhaman Acrylics is sitting on a lot of cash and is examining opportunities for diversification.

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