We expect revenues to grow at a CAGR of 5% in FY19-21E to | 7511 crore as the expanded capacity is likely to come on stream in Q2FY20. In spite of being in a capital intensive business, Vardhman has continuously maintained debt equity ratio below 1. Also, it has a strong balance sheet that would enable it to pursue calibrated growth opportunities. Themanagement’s focus would be on converting more yarn to fabric, whichwould lend better stability to EBITDA margin. We expect the EBITDA margin to be range bound at 16-17% for FY20E, FY21E. We have a HOLD rating on the stock with a target price of | 990 (PE of 8x FY21 EPS).