India: August a good month for Vardhaman investors

Company Performance

India: August a good month for Vardhaman investors

It has been a month of ‘highs’ for Vardhaman Textiles Limited (VTL), described as a ‘Supermarket of Yarns’. And literally so; with 22 production sites spread across the country with a total spindleage of over 9.3 lakhs, VTL has the distinction of being the market leader in a number of yarn segments

VTL, on August 5, 2013, reported over two-fold increase in net profit at Rs 144.5 crore for the first quarter ended June 30, 2013, driven by strong performance of yarn and fabric segments. The company had reported a net profit of Rs 54.89 crore in the corresponding quarter of previous fiscal. Net sales in the quarter under review was at Rs 1,193.61 crore, an increase of 27.03 percent compared with Rs 939.58 crore in the same quarter last year.

Since this announcement, VTL scrips on National Stock Exchange (NSE) have hit the 52-week high six times, reaching Rs 315 on Friday, August 23, before settling at Rs 313.75 at the end of the trading session.

On Thursday, August 22, VTL was the sixth largest traded share (1281.8% more volume than its 2 weeks’ average) on the NSE while it hit a 52-week high of Rs 304.95 before settling at Rs 303.15.

While Midcaps do better in a bull market, they fall harder in a bear market. In the first eight months of AY 2013, BSE Midcap index has fallen by 26%, VTL is amongst about a dozen stocks which have risen by the same percentage, or more.

Investor confidence in VTL appears to be strong, with Chinese yarn orders shoring up, the festive season in India approaching, and weakening global cotton futures contract on the back of an expected bumper crop in India.