Small Cap Textile Stock Jumps 4.45% On Business Expansion Deal of Rs 49.92 Cr

In a recent announcement, Vishal Fabrics Ltd (VFL) disclosed the purchase of 192,000 equity shares of Quality Exim Private Limited (QEPL) for Rs 49.92 crore, at the value of Rs 260 per share as per a valuation report. This was completed on March 19, 2025, which increased the stake of Vishal Fabrics in QEPL from 28.03% to 37.92%. QEPL is an associate company of Vishal Fabrics since March 29, 2024 and deals in the textile industry with the manufacturing, processing, and trading of various yarn and fabrics.

This acquisition was made with QEPL due to its expected increase in business activity, allowing greater strategic investment from VFL and marking QEPL as a related party transaction. QEPL experienced a turnover of Rs 223.33 crore for the fiscal year ending March 31, 2024. The company has an authorized share capital of Rs 4.25 crore and a paid-up share capital of Rs 2.54 crore, which includes both equity shares and preference shares. The transaction was completed in cash, allowing VFL to reinforce its position in the textile sector.

QEPL has experienced consistent financial results in the recent fiscal years, with a revenue of Rs 226.19 crore in FY22 and Rs 207.74 crore in FY23, indicating its presence in the competitive market. This merger is anticipated to improve operational synergies and create further value for both enterprises in new business avenues.

Reinforcing its reputation, Vishal Fabrics continues to show strong financial results. The company's net sales reached Rs 403.7 crore in Q3FY25, marking a 5% increase compared to the previous quarter, while net profit rose by 32% to Rs 9.6 crore. For the nine-month period ending December 31, 2024, net sales stood at Rs 1,128.4 crore and net profit at Rs 21.7 crore. Annual FY24 reported net sales amount of Rs 1,450 crores and net profit of Rs 210 crores showing the company's profitability over the years.

The company's stock appreciated by 2.50% to Rs 25.40 from Rs 24.32 per share, making an intraday high. The stock market value has increased by 38.33% since the 52-week low of Rs 18 per share. The stock price is currently at the high end of the mark with around Rs 42.88 per share. This leads us to believe that a significant portion of the company's founders holds approximately 69% whilst FII's and Retail Investors account for 3.44% and 27.56% respectively.

Vishal Fabrics Ltd was founded in 1985 and is a part of the Chiripal Group which is one of the leaders of the textile industry in Gujarat. The company produces a variety of fabrics such as dyed yarn, denim, and custom textile work, and also distributes them. Vishal Fabrics is certified in quality and sustainability and specializes in dyeing, printing, and processing denim and various other fabrics for in-house collections as well as clients' specific requirements.

Vishal Fabrics' offerings include the popular stretch denim, as well as 100% cotton, cotton blends, and modal fabrics. The company is also famous for its innovative finishes, weaves, blends, and fabulous colour options. The company has multiple state-of-the-art facilities in Ahmedabad, Gujarat which enables it to maintain its extensive production capacity. The firm's client portfolio includes a number of international fashion brands and its market cap is at Rs 482 crore.

Increased stake at QEPL signifies the intent of Vishal Fabrics to focus on and strengthen its position in the textile sector, improve operational efficiency, and create long-term shareholder value.