Textile stock jumps after signing MoU with Government of Tamil Nadu to expand its production

Synopsis:- A textile stock under ₹75 gained after signing an MoU to invest ₹50 crore in expanding fabric and home textile production in Tamil Nadu. Despite margin pressure and volatile operating profits, strong export presence, advanced manufacturing capacity, and a diverse product portfolio continue to support its long-term growth outlook.

The shares of this textile manufacturing company gained up to 2 percent in today’s trading session after the company signed a Memorandum of Understanding with the Government of Tamil Nadu.

With a market capitalisation of Rs 721.98 crore, the shares of VTM Ltd were trading at Rs 71.45 per share, decreasing around 1.81 percent as compared to the previous closing price of Rs 73.33 apiece.

Memorandum of Understanding

According to the company filing, VTM Limited has entered into an MoU with the Tamil Nadu government to invest Rs 50 crore over the next two years to expand the manufacturing of cotton grey fabric and home textile products in Madurai and Virudhunagar. The project aims to generate around 40 direct and 10 indirect jobs, strengthening the company’s regional footprint and supporting local industry growth.

Financial & Other highlights

The company reported a healthy 23% rise in revenue to  Rs 89.88 crore in Q2FY26, reflecting improved operational activity. However, net profit dropped sharply by 76% to  Rs 2.32 crore, indicating margin pressure or higher costs that offset topline growth, signalling the need for stronger profitability controls ahead.

Over the past one year, VTM Ltd’s operating profit has moved from  Rs 13.36 crore in September 2024 to a high of  Rs 26.82 crore in December 2024, before steadily declining to  Rs 5 crore by September 2025. OPM followed a similar trend, peaking at 25.91% and later moderating to 5.56%, indicating significant pressure on margins.

The company offers a diverse textile portfolio ranging from premium cotton dobby and jacquard fabrics to lightweight leno weaves and specialised shirting materials. It also produces eco-friendly Tencel jacquard fabrics and an expanding range of home textiles, including full and king bedding sets and stripe sateen pillowcases, catering to both apparel and home décor markets.

VTM operates a robust manufacturing setup with 258 advanced looms, enabling monthly production of 1.8 million meters of fabric and supporting diverse greyweaving needs. Its global footprint spans major markets, including the USA, Germany, Italy, Brazil, Japan, South Korea, and several Asian and European countries, reflecting strong export capabilities and international demand.

VTM is a leading textile manufacturer specializing in high-quality woven fabrics for both domestic and international markets. With advanced production capabilities and a diverse product range, the company serves apparel, home textile, and industrial segments. Its strong export footprint and modern manufacturing infrastructure highlight its growing industry presence and operational strength.

Written by Abhishek Singh

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