Did Vedant Fashions Experience a 12.6% Drop in Q4 Net Profit Due to Rising Costs?
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Synopsis
In a challenging economic environment, Vedant Fashions Limited, known for its popular ethnic wear brand Manyavar, reported a significant 12.6% drop in its Q4 net profit. This article explores the factors behind the decline and its implications for the company moving forward.
Key Takeaways
- 12.6% drop in net profit for Q4 FY25.
- Revenue increased by 1.2%.
- EBITDA fell by 5.3%.
- Total expenses rose by 6.45% YoY.
- Proposed dividend of Rs 8 per share.
Mumbai, May 6 (NationPress) Vedant Fashions Limited, the parent company of the ethnic wear label Manyavar, announced a 12.6% decrease in net profit for the fourth quarter (Q4) of FY25. The net profit was reported at Rs 101 crore, a drop from Rs 116 crore during the same quarter last fiscal year, as detailed in their stock market disclosures.
Revenue for this quarter remained almost unchanged, with a slight increase of 1.2%, reaching Rs 367.4 crore compared to Rs 363 crore in Q4 FY24.
The EBITDA also experienced a decline of 5.3%, falling to Rs 165.7 crore.
This led to a contraction in EBITDA margins to 45%, down from 48% a year prior, indicating reduced operational efficiency.
Total expenses rose by 6.45% year-on-year (YoY) to Rs 254.79 crore in the fourth quarter of FY25.
The cost of raw materials consumed surged by 19.01% to Rs 45.01 crore, while financing costs increased by 3.06% to Rs 136.23 crore during the same timeframe.
The Board has suggested a final dividend of Rs 8 per equity share for FY25, pending approval from shareholders at the upcoming Annual General Meeting (AGM).
In light of these results, Vedant Fashions' stock price fell to Rs 735, reflecting a 6.88% or Rs 54.3 decline from the previous close of Rs 790.15 on the National Stock Exchange (NSE).
Vedant Fashions specializes in the manufacturing, trading, and retail of ready-to-wear ethnic clothing for men, women, and children across India through its brands Manyavar, Mohey, Mebaz, Twamev, and Manthan.
With over 600 stores spread across more than 200 cities, including 11 international outlets in the UAE and the US, the company has a robust presence.
Vedant Fashions made its stock market debut in 2022, successfully listing at a premium of over 8% at Rs 935, up from its issue price of Rs 866.
Point of View
It is essential to recognize the broader implications of Vedant Fashions' recent financial struggles. While the decline in net profit is concerning, it reflects the challenges many companies are facing in a fluctuating economic landscape. Understanding these trends is vital for stakeholders and consumers alike.
NationPress
23/05/2025
Frequently Asked Questions
What caused Vedant Fashions' net profit drop?
The decline in net profit can be attributed to increased operational costs, including a significant rise in raw material expenses and finance costs.
What is the company's dividend proposal?
The Board has proposed a final dividend of Rs 8 per equity share for FY25, pending shareholder approval.
How has the stock market reacted to these results?
Following the announcement, Vedant Fashions' share price dropped to Rs 735, marking a 6.88% decrease from the previous close.
What brands does Vedant Fashions operate?
Vedant Fashions operates several brands, including Manyavar, Mohey, Mebaz, Twamev, and Manthan.
How many stores does Vedant Fashions have?
The company has over 600 stores across more than 200 cities, including international locations.
