Vardhman Acrylics Ltd. (VARDHACRLC) AI Stock Analysis

• Market Cap: ₹2.61B
• Dividend Yield: 4.02%
• Average Volume (3M): 42.64K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.83
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: IN
• Employees: 326
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.92
• Shares Outstanding: 80,363,750
• 10 Day Avg. Volume: 68,506
• 30 Day Avg. Volume: 42,638
• PEG Ratio: -0.87
• Price to Book (P/B): 1.40
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 15.79
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: ₹33.00 ▼(-13.88% Downside)
• Action: Reiterated Date: 10/07/25
• Date: Action: Reiterated 10/07/25

The overall stock score for Vardhman Acrylics Ltd. is primarily influenced by its financial stability and low leverage, which are positive factors. However, the stock's technical indicators suggest a bearish trend, and the high P/E ratio indicates potential overvaluation. The lack of earnings call data and corporate events means these factors do not contribute to the score.

Positive Factors

Low Leverage / Strong Balance Sheet

A low-debt capital structure gives the company durable financial flexibility, lowering liquidity and default risks. This enables funding of working capital, modest capex or strategic moves internally, and helps the firm withstand textile-cycle volatility without urgent external financing.

Improving Operating Cash Flow

Improved operating cash generation reflects better cash conversion from core acrylic-fiber operations, reducing near-term reliance on external capital. For a commodity-exposed manufacturer, steadier OCF enhances the ability to manage input-cost swings and fund routine reinvestment or working-capital needs.

Positive Revenue Growth

Sustained ~10% revenue growth indicates ongoing demand for acrylic fiber and potential for scale. Continued top-line expansion improves fixed-cost absorption and supports longer-term margin recovery if cost controls hold, strengthening cash generation and competitive positioning over months.

Negative Factors

Inconsistent Free Cash Flow

Volatile free cash flow limits the firm's ability to consistently fund capex, deleveraging or shareholder distributions. In a cyclical textile input environment, uneven FCF increases financing risk and constrains strategic initiatives, making multi-month planning and investment less predictable.

Declining Shareholders' Equity Trend

A falling equity base weakens the company’s cushion against losses and reduces internal funding capacity. Over several quarters this can restrict organic growth financing, increase dependence on external capital, and heighten vulnerability to cyclical downturns in the textile value chain.

Margin Compression / Operational Inefficiency

Declining EBIT and EBITDA margins signal persistent operational inefficiencies or cost pressures. If structural, margin erosion reduces the company’s resilience to raw-material volatility, limits reinvestment capacity and requires corrective actions to restore profitability over the medium term.

Vardhman Acrylics Ltd. Business Overview & Revenue Model

Company Description

Vardhman Acrylics Limited manufactures and supplies acrylic fibers and tows in India. Its products are used in apparels and house-hold products. The company provides its products under the VARLAN brand name. Vardhman Acrylics Limited was incorporated in 1990 and is based in Ludhiana, India. Vardhman Acrylics Limited is a subsidiary of Vardhman Textiles Limited.

How the Company Makes Money

The company makes money mainly by manufacturing and selling acrylic fiber to customers in the textile value chain (e.g., spinners and other textile producers). Revenue is therefore driven by sales volumes of acrylic fiber and realized selling prices, which in turn depend on end-market demand for acrylic-based textiles and prevailing commodity/input cost conditions. Specific disclosures on customer concentration, pricing arrangements, export mix, or material long-term partnerships were not available in the provided prompt, so these details are null.

Vardhman Acrylics Ltd. Financial Statement Overview

Summary

Vardhman Acrylics Ltd. demonstrates strengths in financial stability with a low leverage balance sheet. However, the income statement reveals challenges in maintaining consistent revenue and profitability margins. Cash flow performance is mixed, with improvements in operating cash flow but instability in free cash flow. The company needs to address operational inefficiencies and enhance its profitability margins to sustain long-term growth.

Income Statement

The company shows fluctuating revenue trends with a decline in recent years. Gross and net profit margins are inconsistent, indicating volatility in cost management and profitability. There is a noticeable decrease in EBIT and EBITDA margins, pointing to operational inefficiencies.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio, indicating financial stability and lower financial risk. The company maintains a strong equity ratio, reflecting a solid capital structure. However, a declining trend in stockholders' equity raises concerns about long-term growth potential.

Cash Flow

Operating cash flow shows improvement, but free cash flow has been inconsistent, impacting the company's ability to reinvest and distribute dividends. The operating cash flow to net income ratio is positive, suggesting decent cash conversion, although free cash flow growth is uneven.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	3.13B	2.82B	2.97B	4.26B	3.03B	2.80B
Gross Profit	780.70M	829.60M	993.60M	1.36B	687.55M	1.08B
EBITDA	158.60M	193.10M	272.67M	488.78M	232.36M	630.53M
Net Income	101.90M	118.30M	175.36M	328.58M	145.59M	429.17M
Balance Sheet
Total Assets	3.39B	3.49B	3.28B	3.42B	3.02B	4.85B
Cash, Cash Equivalents and Short-Term Investments	1.63B	1.25B	821.69M	909.99M	818.51M	2.80B
Total Debt	0.00	1.80M	11.37M	3.39M	27.85M	3.59M
Total Liabilities	1.08B	1.10B	848.30M	968.81M	900.44M	867.41M
Stockholders Equity	2.31B	2.39B	2.43B	2.45B	2.12B	3.98B
Cash Flow
Free Cash Flow	-156.90M	211.20M	43.56M	305.34M	-120.02M	389.48M
Operating Cash Flow	-113.00M	261.60M	76.04M	385.27M	-94.14M	394.57M
Investing Cash Flow	506.70M	-90.80M	120.32M	-367.33M	1.90B	-825.75M
Financing Cash Flow	-122.10M	-170.90M	-195.03M	-26.03M	-1.98B	-11.04M

Vardhman Acrylics Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 38.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:VARDHACRLC, the sentiment is Negative. The current price of 38.32 is above the 20-day moving average (MA) of 34.08, above the 50-day MA of 36.07, and below the 200-day MA of 40.99, indicating a bearish trend. The MACD of -1.13 indicates Positive momentum. The RSI at 35.65 is Neutral, neither overbought nor oversold. The STOCH value of 40.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:VARDHACRLC.

Vardhman Acrylics Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PASUPTAC	74 Outperform	₹3.95B	4.61	―	―	36.99%	10.60%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
VARDHACRLC	56 Neutral	₹2.61B	10.89	―	4.02%	―	―
LORDSCHLO	54 Neutral	₹3.02B	23.33	―	―	39.31%	―
KANORICHEM	45 Neutral	₹2.79B	23.83	―	―	-1.30%	-27.85%
DIAMINESQ	43 Neutral	₹2.17B	-19.09	―	0.38%	―	―

Vardhman Acrylics Ltd. Corporate Events

Vardhman Acrylics Posts Higher Income and Profit in Q3 FY2025-26

Vardhman Acrylics Ltd. reported its unaudited financial results for the quarter and nine months ended 31 December 2025, showing total income of ₹79.67 crore for the quarter and ₹245.95 crore for the nine-month period, both higher than the comparable period a year earlier. Quarterly profit before tax rose to ₹9.64 crore and net profit to ₹7.41 crore, contributing to nine‑month net profit of ₹11.66 crore, reflecting improved operational performance driven by higher revenues and better inventory and cost management; earnings per share for the nine months reached ₹1.45, signalling steady profitability for shareholders ahead of the full-year close.