Arvind Ltd., one of the largest integrated textile and branded apparel players, recorded 2.1 per cent growth in revenue and 48 per cent growth in profit after tax for the full year ended March 31, 2012. Revenue for the year stood at Rs. 4,925 crores against Rs. 4,085 crores for the previous year. Net profit after tax from ordinary activity stood at Rs. 245 crores (Rs. 165 crores). At the operating level, consolidated EBIDTA for the year increased by 14 per cent at Rs. 602 crores (Rs. 529 crores). The Board of Directors has recommended a dividend of 10 per cent for 2011-12.
The growth in revenue is driven by 44 per cent expansion in brands & retail business and significant increases in prices of fabrics caused by very high cotton prices. Textile business grew by 15 per cent. Within textiles, denim grew by 18 per cent and wovens by 11 per cent. However, there was marginal drop in EBIDTA margin to 12.2 per cent for the year against 13 per cent for the previous year as there was a drop in operating margins in brands & retail business as the company had to absorb part of higher inventory cost.
The consolidated revenue for the quarter ended March 31, 2012, is up by six per cent at Rs. 1,278 crores as against Rs. 1,202 crores in the corresponding quarter of the previous year.
Commenting on the results as well as outlook of the company, Mr. Jayesh Shah, Director & Chief Financial Officer, said: “The financial year 2011-12 was extremely challenging for Arvind. The year was characterized by global slowdown, weak retail demand at home, high volatility in cotton prices and foreign exchange and higher interest cost. It is satisfying to note that in the backdrop of such a challenging environment, our company has closed the financial year 2011-12 with 48 per cent growth in net profit. The Board has recommended a dividend @ 10%. Hitherto the company was conserving cash for reduction of the debt. The broad-based portfolio of businesses has brought predictability in our earnings. Further the company is likely to be cash surplus in the coming few years after meeting all our growth requirements. This has led the Board to bring back the company on the dividend list after a gap of six years.”
The count of company-run stores has risen from 428 in 2010-11 to 568 in 2011-12, including the Mega Mart format outlets. Through the stores, Arvind sells premium foreign brands like Arrow and US Polo, amongst others. “Our target is to be a Rs. 8,000-crore plus revenue company by 2015”, Mr. Shah added.
Mr. Sanjay Lalbhai, Chairman & Managing Director, observed: “We are predominantly investing in brands, retail and technical textiles. Our total outlay for this year (FY13) will be around Rs. 300 crores. Of this, Rs. 50 crores will be spent on becoming self-reliant in power. Of the remaining Rs. 250 crores, 40-50 per cent will be invested in textiles, while the rest shall go to brand and technical textiles”.