Arvind Ltd

The company’s performance in Q1FY13 was hit due to a strike at its Naroda factory and lowering of prices. But the company seems to have bounced back in Q2FY13 with YoY net sales rising 9% at Rs.1347 crore and net profit was up 5% at Rs.65 crore. Revenue from textiles rose 6%, with a volume growth of 25% in shirting and 4% in denim fabrics, partially off set by 7% drop in prices of shirting fabrics. There was a 6% increase in revenue of brand & retail business. Brands & Retail Business grew by 6%, share of apparel & fabric retailing grew to 35.8% from 35.5% and share of domestic revenue grew to 71% from 70%. EBIDTA margin was at 12.4%, down from 13.1% (YoY) but up from 11.2% on QoQ. EBIDTA margin was lower due to loss on account of unwinding of foreign exchange hedges. Other Income includes profit from sale of land of Rs.11.1 crore.

Q3 is expected to be better, given the festive season demand and given the fact that cotton prices are stable, the company could have a much better growth in its textile unit in coming quarter. The company has opened two stores of Debenhams and it plans to open 8 more stores in the next 12 months, expecting revenues from this brand at around Rs.100 crore. In its realty sector, it has sold three fourth of its projects launched and is planning to launch 3 more. In FY14, the company hopes to have a topline of Rs.300 crore from this segment. The company expects revenue growth of 10-12% this fiscal and it expects margins for the current year to be better than the last year.