By K. Gopalakrishnan
Major investment cycle spans spinning, weaving, processing, technical textiles, garments and green energy as Vardhman positions itself for the next phase of India’s textile growth
For more than six decades, Vardhman Textiles has grown alongside India’s textile industry, building one of the country’s most extensive vertically integrated textile manufacturing platforms. Today, as global sourcing patterns undergo a structural shift and India strengthens its position as a preferred textile and apparel sourcing destination, the company is embarking on one of the most significant investment cycles in its recent history.
Vardhman has committed approximately ₹3,660 crore to a broad-based growth and modernisation programme, covering spinning and fabric, technical textiles, fabric processing, garment manufacturing and green-energy infrastructure. Rather than being a conventional capacity expansion programme, the investment is designed to move the company further up the textile value chain, improve productivity and margins, strengthen sustainability credentials and create a more resilient business model.
The scale and breadth of the programme underline Vardhman’s confidence in the long-term prospects of the Indian textile industry. The company believes that global supply chains are being redrawn as brands and retailers diversify sourcing away from concentrated geographies and increasingly seek large, compliant and technologically capable manufacturing partners. At the same time, consolidation in India’s spinning industry has resulted in more than 11 million spindles permanently exiting the market, creating an opportunity for financially stronger and technologically advanced companies to gain share.
Vardhman intends to be one of those companies.
Strong performance despite challenging market conditions
The investment programme comes against a backdrop in which the company’s overall performance remained relatively stable. During the year under review, Vardhman Textiles recorded revenue from operations of ₹9,652.33 crore, compared with ₹9,587.21 crore in the previous year. Exports, measured on an FOB basis, stood at ₹3,986.44 crore, compared with ₹4,028 crore in the previous year, representing a decline of 1.03%.
While the relatively modest growth in revenue and slight decline in exports reflect the challenging operating environment, Vardhman’s strategy is clearly focused on looking beyond near-term market cycles.
Chairman & Managing Director Shri Paul Oswal sees the industry entering an important structural phase. According to him, the consolidation of the textile industry, changing cotton economics and the prospect of Free Trade Agreements with the UK and European Union could become powerful engines of growth for Indian textiles. Vardhman’s scale, integration, modernised assets and long-standing customer relationships, he believes, place the company in a strong position to participate in this next phase.
That outlook provides the strategic context for the ₹3,660-crore investment.
Investing through the cycle
The central philosophy behind the programme is to invest through the cycle rather than retreat during a period of industry consolidation.
Vardhman points to its reaffirmed CRISIL AA+/Stable rating and a conservative debt-to-equity ratio of around 0.2 times as evidence of its financial capacity to undertake the investment. With weaker players exiting and global sourcing increasingly favouring scale, compliance and technological capability, the company believes that investment at this stage can enable it to emerge from the current cycle with a larger market share.
Importantly, the ₹3,660 crore is not concentrated in one segment. It is spread across five strategic priorities, enabling Vardhman to strengthen virtually the entire textile value chain.
₹1,200 crore modernisation of spinning and fabric
Spinning and fabric remain at the core of Vardhman’s manufacturing platform, and a substantial part of the investment is directed towards modernising this base.
The company added approximately 35,000 spindles during the year, while a modernisation programme of around ₹1,200 crore is being deployed across its spinning and fabric operations. The objective goes beyond increasing capacity. Modern equipment is expected to improve operating efficiency, reduce manufacturing costs and enable Vardhman to manufacture increasingly complex and higher-margin yarns.
This is particularly important in an environment where commodity spinning remains exposed to fluctuations in cotton prices and international yarn markets. By increasing the proportion of differentiated and speciality products, Vardhman is seeking to reduce its dependence on commodity yarn margins.
The strategy is therefore not simply more spindles, but more productive spindles producing higher-value products.
Entry into technical textiles
One of the most significant strategic moves within the programme is Vardhman’s formal entry into technical textiles, marking an expansion into a category with higher-value applications and potentially stronger margins.
The company’s initial focus is on synthetic functional fabrics, including materials for windcheaters, rain-protective garments and other performance applications. Phase I is planned at approximately 1.5 million metres per month.
Early market response has reportedly been encouraging, including interest from sportswear brands. For Vardhman, technical textiles represent a logical extension of its existing integrated manufacturing capabilities into more engineered applications with growing end-market demand.
This move could prove strategically important over the longer term as the company seeks to diversify its product portfolio and increase the share of specialised, value-added products.
₹350 crore expansion at Budhni
Downstream integration is another major pillar of the investment strategy.
Vardhman has invested ₹350 crore in an expansion at Budhni, Madhya Pradesh, adding approximately 31 million metres of annual processed-fabric capacity. With this addition, the company’s total fabric-processing capacity, including technical textiles, has reached approximately 240 million metres per annum.
The move is strategically significant because processing provides Vardhman with greater control over product differentiation and enables it to capture higher realisations compared with the sale of grey fabric.
The company therefore expects the investment to contribute not only to revenue growth but also to margin improvement as more output moves towards processed and value-added fabric.
The Budhni processing line reached commercial production in March 2026, making it one of the key investments already moving from the capital-expenditure phase into revenue generation.
Doubling garment capacity
Vardhman is also increasing its exposure to the most downstream and consumer-facing segment of the textile value chain.
The company’s garment manufacturing capacity is being expanded from 2.2 million shirts per annum to 4.5 million shirts per annum.
The expansion is significant because garments offer greater value addition than commodity yarn and provide Vardhman with a stronger presence closer to the end consumer.
The garment capacity expansion is targeted for completion in FY27.
Combined with its existing yarn, fabric and processing capabilities, the larger garment operation will further strengthen Vardhman’s vertically integrated model and its ability to service international brands seeking integrated and reliable supply chains.
Green energy becomes a strategic investment
Sustainability is another major component of the ₹3,660-crore programme.
Vardhman’s phased green-capex programme includes replacing coal-fired boilers with biomass and paddy-straw systems, scaling solar generation towards 70 MWp, and adding renewable capacity through investments including a stake in a captive wind-solar project.
The company is targeting 60% green power by FY2027-28.
The significance of this investment extends beyond environmental performance. Energy is a major cost component in textile manufacturing, and greater reliance on renewable and alternative energy sources can reduce exposure to fossil-fuel price volatility.
At the same time, sustainability has become increasingly important to global brands and sourcing organisations. Buyers are demanding greater transparency, traceability, recycled inputs and lower-carbon manufacturing. Vardhman’s investments in green energy, together with its ReNova initiatives, are therefore intended to strengthen both its environmental credentials and its competitiveness with international customers.
The bulk of the company’s green-capex programme is already complete.
A deliberate move up the value chain
The common thread running through the entire ₹3,660-crore programme is value addition.
Vardhman expects the investments to strengthen the business across four dimensions: revenue growth, margin enhancement, quality and productivity, and cost and ESG resilience. New spinning and fabric capacity will generate incremental revenues as utilisation increases, while processed fabrics are expected to deliver higher realisations than grey fabrics.
At the same time, modernisation is expected to lower the cost base, while technical textiles, value-added fabrics and garments carry higher margins than commodity yarn.
This represents a fundamental shift in the company’s growth strategy: from volume-led expansion to a combination of scale, productivity, integration and value addition.
The company explicitly expects the programme to make its business less cyclical, less commoditised and more profitable across the cycle.
Positioned for India’s changing textile opportunity
Vardhman’s investment thesis is supported by several developments in the global and Indian textile industry.
India is the world’s second-largest spinning nation and is positioned to absorb incremental global demand. Potential and emerging trade agreements with the UK, EU and US could improve the competitiveness of Indian textiles and apparel in major export markets. The company also points to the removal of US tariffs as having restored India’s competitiveness in apparel, with garment exporters moving back towards fuller utilisation.
At the same time, Chinese yarn offtake from India has increased sharply, while China’s own spinning capacity is reportedly declining from a peak of approximately 112 million spindles towards 84 million. This global consolidation could tighten supply and favour large, reliable producers.
However, Vardhman recognises that commodity spinning remains vulnerable to the differential between domestic and international cotton prices. Its response is to increase its exposure to processed, downstream and value-added segments, where it sees more structural opportunities.
China+1 and the global sourcing opportunity
The company also sees the ongoing China+1 shift as an important opportunity.
As global brands seek scaled and compliant alternatives to concentrated sourcing locations, Vardhman believes its integrated manufacturing base, product range, customer relationships and financial strength can position it as a preferred supplier.
The company intends to focus on higher-margin product categories, convert improved FTA access into export growth in the UK, EU and US apparel markets, and differentiate itself through sustainability, including recycled, traceable and low-footprint products.
This strategy is supported by the breadth of Vardhman’s existing manufacturing platform.
Scale as a competitive advantage
Headquartered in Ludhiana, Vardhman operates manufacturing facilities across Punjab, Himachal Pradesh and Madhya Pradesh. Its installed infrastructure includes approximately 1.25 million spindles, 1,550 looms, around 240 million metres of processed-fabric capacity annually and garment capacity of 2.20 million shirts per year before the current garment expansion is completed. The company serves customers across more than 60 countries.
Its portfolio covers greige and dyed yarns in cotton, polyester, acrylic and blends, along with speciality yarns such as organic cotton, melange, core-spun, gassed mercerised and super-fine variants. Its downstream portfolio includes woven fabrics for shirting and trousering and finished garments for premium international brands.
This vertical integration is becoming increasingly relevant as international customers seek suppliers capable of offering consistency, traceability, quality control and shorter lead times across multiple stages of production.
Disciplined execution will be critical
While the size of the investment is substantial, Vardhman is emphasising that execution discipline is as important as the investment itself.
The projects are being commissioned in phases to align capacity with demand. The Budhni processing line and technical-textiles facility began commercial production in March 2026, the bulk of the green-capex programme is complete, and the garment expansion is scheduled for completion in FY27.
The company intends to ramp up utilisation of the newly commissioned facilities and demonstrate returns before undertaking further major expansion.
That measured approach is particularly important in a cyclical industry. Rather than simply adding capacity, Vardhman is attempting to build capacity that is differentiated, efficient and strategically positioned for the next phase of demand.
Building the next phase of Vardhman’s growth
Vardhman’s ₹3,660-crore investment programme represents more than an expansion of manufacturing capacity. It is a strategic attempt to reposition the company for a textile industry that is becoming increasingly consolidated, technology-driven, sustainability-conscious and globally integrated.
The programme strengthens the company’s traditional spinning base while simultaneously expanding processing, garments and technical textiles. It also invests heavily in modernisation and renewable energy, creating a combination of scale, downstream integration, product differentiation, energy resilience and sustainability.
For Vardhman, the timing is deliberate. Global brands are diversifying their sourcing bases; India’s competitiveness is expected to improve through trade agreements; weaker spinning capacity is exiting the market; and demand for higher-value and sustainable textile products is increasing.
The company’s underlying proposition is therefore straightforward: use financial strength and an integrated manufacturing platform to invest through the cycle, capture market share as the industry consolidates, and move progressively towards higher-value segments.
As Vardhman itself puts it, the ₹3,660-crore programme is ultimately about building on its structural advantages of scale, integration, financial strength and execution discipline at a time when the global textile industry is increasingly rewarding precisely those qualities.
With more than 24,000 employees, manufacturing operations certified to ISO 9001, ISO 14001 and ISO 45001 standards, and sustainability targets that include Net Zero Emissions by 2045, the company enters this next phase with an established industrial base.
The success of the strategy will ultimately depend on how quickly the new capacities are absorbed, how effectively Vardhman converts additional capacity into higher-value sales and margins, and how successfully it translates India’s emerging global sourcing opportunity into long-term customer relationships.
But the direction is unmistakable. Vardhman is not simply preparing to grow larger; it is investing to become more integrated, more specialised, more sustainable and more competitive across the textile value chain.
MANUFACTURING CAPACITY
Manufacturing plants 13
Number of spindles 1.25 million
Number of looms 1,550
Processing capacity 240 million meter p.a
Garmenting capacity 2.20 million
MANUFACTURING OUTPUT
Yarn 2,78,775 MT
Fabric (Greige) 1,969 Lac meter
Fabric (Processed) 1,642 Lac meter
Garments 2.17 Million pieces