The second quarter (July-September) earnings estimates of the apparels sector by ICICI Securities is out. The brokerage house expects Vardhman Textiles to report a net profit of Rs 346.2 crores up 94.2 per cent quarter-on-quarter Q-o-Q). The revenue of the textile firm is expected to decrease by 0.4 per cent Q-o-Q (down 8.8 per cent Y-o-Y) to Rs 1,502.7 crores. Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 9.7 per cent Q-o-Q (down 8 per cent Y-o-Y) to Rs 282 crores.

Consolidated revenues are likely to decline 8.8 per cent YoY to Rs 1,502.7 crores on account of sale of stake in Vardhman Yarns and Threads. On the segmental business front it is expected that the yarn volumes would increase by 2 per cent YoY while the fabric volume is expected to increase by 7 per cent YoY. Consolidated operating margins are likely to increase marginally by 16 bps to 18.8 per cent on account of higher margins in the acrylic business. On the operational front, Vardhman's performance is expected to be moderate.

However, owing to stake sale (40 per cent) in Vardhman Yarns and Threads, an exceptional income to the tune of Rs 210 crores is expected this would boost consolidated net profit to Rs 346.2 crores v/s net profit of Rs 125 crores in Q2FY16. Excluding the exceptional profit, net profit is expected to increase by 9 per cent YoY to Rs 136.2 crores.