1. At a Glance
Picture this — a ₹320 crore small-cap company controlling90% of India’s operational acrylic fibre capacity, yet struggling to spin profits as smoothly as its yarn. That’sVardhman Acrylics Ltd (VAL)for you — a company that’s basically the monopolist of a shrinking market, wrapped in the legacy shawl of its parent,Vardhman Textiles Ltd (which owns 70.74%).
As ofQ2 FY26 (September 2025), the company reportedsales of ₹89.4 croreand aPAT of ₹2.5 crore, translating to a modestEPS of ₹0.31. Despite the bleak textile macro, YoY revenue grew26.6%, and PAT jumped a dramatic60.3%— but before you clap, the operating profit margin stood at a limp0.19%, nearly microscopic.
Trading at₹39.9with aP/E of 31.5,ROE at 4.86%, and ajuicy dividend yield of 3.76%, VAL looks less like a high-growth yarn spinner and more like a fixed deposit with attitude. The market, however, seems to enjoy slow-turning spindles — even if the financial threads are fraying.
2. Introduction
Ah, the acrylic fibre industry — where old-school sweaters meet modern financial struggle.Vardhman Acrylics Ltd, born in 1990, has seen it all: import wars, polyester revolutions, and demand collapses every few seasons.
Imagine holding90% of India’s domestic acrylic fibre capacity, yet still hunting for profit margins with a magnifying glass. That’s VAL’s paradox. It produces “Varlan” branded fibres that go into everything from your grandma’s blankets to those sweaters you regret buying every April.
The parent,Vardhman Textiles, is one of the most respected names in Indian textiles, giving VAL access to world-class management, processes, and a thick safety net. But even the parent’s aura can’t weave magic into fibre prices when raw material (acrylonitrile) costs act like wild threads on a broken loom.
Investors might have expected a warm winter in FY26, but the latest numbers suggest a chilly breeze. So, does this textile minion still deserve space in your portfolio closet? Let’s unravel.
3. Business Model – WTF Do They Even Do?
VAL’s business is delightfully simple —make acrylic fibre,sell it, andpray for margins. The company manufacturesAcrylic Fibre and Towat itsJhagadia, Gujarat facilitywith a total capacity of21,000 tonnes per annum (TPA).
Their customer base covers the entire range of human comfort — fromhosiery and woven appareltohome furnishings, carpets, and industrial uses. You’ve likely worn their product, maybe even slept under it — that too without knowing. The irony? VAL earns pennies on every rupee of fabric happiness it creates.
They market their product under theVarlanbrand — a name that sounds like a mix of “Vardhman” and “nylon” but makes neither’s profits.
Despite being part of the textile behemoth, VAL’s operations are standalone — raw materials sourced, fibres spun, products sold — all within a market that’s getting squeezed by cheaper synthetics like polyester. Acrylic fibre might have the warmth, but the world now prefers affordability over fuzzy coziness.
So, the model is straightforward: high-capacity, low-margin, capital-light, but painfully cyclical. Sounds familiar? It’s like the Indian textile story in a nutshell — or rather, in a tightly wound bobbin.
4. Financials Overview
Let’s put the company’sQ2 FY26numbers on the loom and examine the weave:
| Metric | Latest Qtr (Sep 2025) | YoY Qtr (Sep 2024) | Prev Qtr (Jun 2025) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | ₹89.4 Cr | ₹70.62 Cr | ₹69.39 Cr | 26.6% ↑ | 28.8% ↑ |
| EBITDA | ₹0.17 Cr | ₹0.76 Cr | -₹0.63 Cr | -77.6% ↓ | — |
| PAT | ₹2.50 Cr | ₹1.56 Cr | ₹1.75 Cr | 60.3% ↑ | 42.9% ↑ |
| EPS (₹) | ₹0.31 | ₹0.19 | ₹0.22 | 63.1% ↑ | 40.9% ↑ |
Commentary:The numbers scream one thing:“Other Income Zindabad!”Operating profit is nearly flat, but PAT looks decent — thanks to a steady₹3–4 crore of other incomeper quarter. Without that, profits
would have melted faster than acrylic in a dryer.
Margins? Let’s just say the operating profit margin (0.19%) could pass for a printing error. Still, the company managed to post positive PAT, showing discipline and cash efficiency. But if this is a textile boom, one shudders to imagine the bust.
5. Valuation Discussion – Fair Value Range Only
Let’s try valuing this yarn spinner.
Step 1: Annualized EPSQ2 EPS = ₹0.31 → Annualized EPS = ₹0.31 × 4 =₹1.24
Step 2: P/E MethodIndustry average P/E = 20. VAL’s current P/E = 31.5→ Fair Value = ₹1.24 × 20 =₹24.8 per share (conservative)→ On current P/E (31.5): ₹1.24 × 31.5 =₹39.1 per share (optimistic)
Step 3: EV/EBITDA MethodEV = ₹290 Cr, EBITDA (TTM) ≈ ₹15.8 Cr → EV/EBITDA =18.3xIndustry average (8–12x). Fair EV range implies share price₹25–₹35.
Step 4: DCF (Simple Estimate)Assuming 5% cash flow growth, ₹10 Cr PAT base, 10% discount → Fair range ₹30–₹40.
🧵 Fair Value Range (Educational Purpose Only): ₹25 – ₹40 per shareThis fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
October 2025 brought the only “excitement” this company has seen all year: publication of itsQ2/H1 FY26 results, showing H1 revenue of₹158.79 croreand PAT of₹4.25 crore. The boardroom is quieter than a factory night shift — no big M&A, no new plants, and not even a stray demat transfer to gossip about.
Also, in March 2024, the long-time MDB.K. Choudharymoved up to becomeVice-Chairman (Non-Executive). Translation: the man retired gracefully and handed the stress baton to someone else.
Other than that, corporate updates mostly read: “No shares dematerialised this quarter.” That’s how calm (read: uneventful) this company is.
If you
