Cotton price jump may not hit margins much-:- Equity Research

Cotton prices have risen significantly since mid April but Sachit Jain, MD of Vardhman Textiles   does not see much impact on margins as yarn prices have also been rising alongside, albeit at a slower pace. The company has also bought most of its cotton requirements before April and holds inventory of nearly 6-8 months. In an interview with CNBC-TV18, Jain says prices of Shankar-6 cotton have jumped up to nearly Rs 47,000 per candy from Rs 32,500-33,500 few months ago. There are reports that cotton output may fall to 5-year lows and Jain says this is because yield and area under cultivation have both fallen, with fly infestation in Punjab aggravating the shortage situation. Refraining from providing any guidance, he says the company maintains its target of keeping margins between 18-22 percent.