Vardhman Textiles' Q4 net rises two-fold at Rs 217.49 cr

The firm also announced sale of 40% stake in joint venture firm Vardhman Yarns and Threads to its partner A&E Global

Vardhman Textiles on Monday reported over two-fold increase in net profit at Rs 217.49 crore for the January-March quarter compared to that of Rs 90.2 crore in the same period of previous year.

Vardhman Textiles also announced sale of 40 per cent stake in joint venture firm Vardhman Yarns and Threads (VYTL) to its partner A&E Global. A&E Global holds 49 per cent stake in VYTL, at present.

Net sales decreased marginally by 1.26 per cent during the quarter under review to Rs 1,389.93 crore as against Rs 1,407.79 crore in the year-ago period, Vardhman Textiles said in a filing to the BSE.

For the entire financial year ended March 2016, Vardhman Textiles' net profit stood at Rs 653.05 crore as against Rs 359.11 crore in the previous financial year.

Vardhman Textiles' net sales in 2015-16 were at Rs 5,587.14 crore compared with Rs 5,742.03 crore in 2014-15.

In a separate filing, Vardhman Textiles informed that its board has approved sale of 40 per cent stake in Vardhman Yarns and Threads Ltd (VYTL) to its joint venture partner A&E Global.

"In 2011, KPS Capital Partners acquired A&E Global. Since then, KPS has taken a strategic direction for growth of A&E Global, both organically and inoganically...In line with this strategy, A&E Global expressed their desire to have a majority ownership in VYTL to consolidate the VYTL financial as required under US GAAP," the company said.

At present, A&E Global holds 49 per cent stake in VYTL.

Post acquisition, Vardhman Textiles will have a put option and A&E Global will have a call option on the remaining 11 per cent stake, it said.

Based on independent valuer's report, the valuation of VYTL stood at Rs 990 crore as on March 31, 2016.

"The consideration to be received by the company for the sale ...Sharll be determined based on the said agreed valuation and the adjustment formula linked to the closing date," filing added.