💰 Financial Performance

Revenue Growth by Segment

The company reported a significant historical revenue jump of 60% in FY22, reaching INR 1,547 Cr compared to INR 968 Cr in FY21. The denim fabric segment remains the primary driver, recently bolstered by a new INR 100 Cr merchant export order for premium denim fabrics, representing a roughly 6.5% growth contribution relative to FY22 revenue levels.

Geographic Revenue Split

While specific regional percentages are not fully detailed, the company is aggressively expanding its international footprint, evidenced by the recent INR 100 Cr export order from Kiran Enterprises. Historically, the company has transitioned from a domestic-heavy focus to a 'Merchant Export' model to capture global denim demand.

Profitability Margins

Net Profit Before Tax (Consolidated) for H1 FY26 stood at INR 25.39 Cr, showing stability compared to the full-year FY25 figure of INR 50.08 Cr. Historical Net Profit Margin improved from 1.9% in FY21 to 4.5% in FY22, driven by better absorption of fixed costs and higher realizations in the denim segment.

EBITDA Margin

EBITDA margin stood at 10.4% in FY22 (INR 161 Cr), an improvement of 130 basis points from 9.1% in FY21. This expansion was achieved through manufacturing efficiencies and a shift toward premium denim products which command higher market prices.

Capital Expenditure

The company has focused on debt reduction and working capital management in H1 FY26, with a repayment of long-term borrowings amounting to INR 51.44 Cr. Historical depreciation of INR 33.20 Cr in FY25 suggests a steady asset base of processing and weaving machinery.

Credit Rating & Borrowing

India Ratings and Research affirmed the company's rating at 'IND A-' and revised the outlook to 'Stable' from 'Negative' in December 2025. This rating applies to INR 63.61 Cr of term loans and fund-based working capital facilities, reflecting improved liquidity and a stronger capital structure following a security premium inflow of INR 114.75 Cr in H1 FY26.

⚙️ Operational Drivers

Raw Materials

The primary raw materials are cotton yarn and indigo dyes. Cotton yarn typically accounts for approximately 60-70% of the total cost of production for denim fabrics.

Import Sources

Raw materials are primarily sourced from major cotton-producing states in India, specifically Gujarat and Maharashtra, leveraging the company's location in Ahmedabad to minimize transit costs.

Key Suppliers

Specific third-party supplier names are not disclosed, but the company operates within the Chiripal Group ecosystem, which provides integrated access to textile processing and raw material sourcing.

Capacity Expansion

The company maintains a large-scale denim manufacturing facility. While specific MTPA figures are not in the current H1 report, the focus has shifted to 'premium denim' capacity to fulfill high-value orders like the recent INR 100 Cr contract.

Raw Material Costs

Raw material costs are highly sensitive to cotton price cycles. In FY22, COGS was INR 1,269 Cr, representing 82% of revenue. The company manages this through bulk procurement and inventory hedging.

Manufacturing Efficiency

Manufacturing efficiency is reflected in the EBITDA margin growth from 7.5% in FY19 to 10.4% in FY22. The company utilizes advanced denim processing lines to maintain high-quality standards for 'Anyone, Anytime, Anywhere' branding.

Logistics & Distribution

Distribution is managed through a mix of direct sales and merchant exports. The recent INR 100 Cr order highlights the company's ability to handle large-scale international logistics and distribution.

📈 Strategic Growth

Expected Growth Rate

15-18%

Growth Strategy

Growth will be driven by a shift toward high-margin premium denim exports, as evidenced by the recent INR 100 Cr order. The company is also consolidating its position by acquiring stakes in associates like Chiripal Textile Mills and Nandan Industries (effective April 2024) to create a more integrated textile conglomerate and capture a larger share of the value chain.

Products & Services

The company manufactures and sells a wide range of denim fabrics, including premium denim, basic denim, and versatile textile fabrics for the apparel industry.

Brand Portfolio

Vishal Denim, Chiripal Group.

New Products/Services

The company is focusing on 'Premium Denim Fabrics' which are expected to contribute significantly to the export revenue mix, targeting higher-end global fashion brands.

Market Expansion

Expansion is targeted at international markets through merchant export orders. The company is leveraging its Ahmedabad base to serve both domestic hubs and global clients.

Market Share & Ranking

Vishal Fabrics is a leading player in the Indian denim industry, consistently ranking among the top denim fabric manufacturers by capacity in the Gujarat textile hub.

Strategic Alliances

The company has strategic associations with Chiripal Textile Mills Private Limited, Nandan Industries Private Limited, and Quality Exim Private Limited, where it holds more than 20% equity, allowing for proportionate profit consolidation.

🌍 External Factors

Industry Trends

The denim industry is shifting toward sustainable and premium fabrics. Vishal Fabrics is positioning itself for this by focusing on 'premium' ranges and consolidating its supply chain to ensure quality and cost control in a growing global market.

Competitive Landscape

Key competitors include other large Indian denim manufacturers like Arvind Ltd and Nandan Denim. Vishal competes on cost efficiency and its ability to fulfill large-scale export orders.

Competitive Moat

The company's moat is built on its large-scale manufacturing capacity and its integration within the Chiripal Group, which provides cost leadership in processing. This is sustainable due to the high capital entry barriers in denim manufacturing and established global distribution networks.

Macro Economic Sensitivity

The company is sensitive to GDP growth as textile demand is closely linked to consumer discretionary spending. Inflation in raw material costs (cotton) directly impacts the 82% COGS ratio.

Consumer Behavior

Increasing demand for 'fast fashion' and premium denim apparel globally is driving the company's shift toward the export of high-quality fabrics.

Geopolitical Risks

Trade barriers or changes in import duties on Indian textiles in key export markets could impact the feasibility of the merchant export business model.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by textile manufacturing standards and export-import policies. The company adheres to Ind AS 110 and Ind AS 28 for the consolidation of its associate companies.

Environmental Compliance

As a textile processor, the company must comply with strict GPCB (Gujarat Pollution Control Board) norms regarding wastewater treatment and chemical discharge, though specific ESG spend is not listed.

Taxation Policy Impact

The company paid INR 9.38 Cr in income tax during H1 FY26. The effective tax rate historically has been around 25-26% based on FY22 figures (INR 24 Cr tax on INR 93 Cr PBT).

Legal Contingencies

The financial statements are currently subject to 'Limited Review' by auditors. No specific high-value pending court cases or litigation values were disclosed in the provided interim reports.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of cotton prices and the ability to maintain the 'Stable' outlook if working capital cycles stretch further. Trade receivables increased by nearly INR 50 Cr in just six months.

Geographic Concentration Risk

There is a high geographic concentration of manufacturing in Ahmedabad, Gujarat, making the company dependent on the state's industrial policies and labor availability.

Third Party Dependencies

The company has a dependency on merchant exporters like Kiran Enterprises for large-scale revenue realization (INR 100 Cr single order dependency).

Technology Obsolescence Risk

The company mitigates technology risk by maintaining a high depreciation rate (INR 16.74 Cr in H1 FY26), indicating continuous investment in and usage of modern weaving and processing machinery.

Credit & Counterparty Risk

Credit risk is evident in the trade receivables increase of INR 49.19 Cr. The company manages this through credit ratings and potentially securing payments via letters of credit for export orders.