Arvind Ltd. has registered 58 per cent growth in consolidated net profit for the quarter ended September 30, 2011, at Rs. 62 crores as against Rs. 39 crores in the corresponding quarter of the previous year. The consolidated revenue for the quarter is up by 23 per cent at Rs. 1,256 crores (Rs. 1,025 crores). The revenue growth of 46 per cent in branded apparel and retail business segments and 18 per cent revenue growth in textile business were the key driver of such an impressive financial performance of the company.
Commenting on the results as well as the outlook of the company, Mr. Jayesh Shah, Director & Chief Financial Officer, said: “While revenue growth continues to be led by Brands & Retail business, operating margins have improved on account of improvement in EBITDA margin in textile business by around 3%. Textile business has improved the margins despite sharp increase in raw material cost. We believe that Arvind is well poised to achieve 20% revenue growth during the current financial year on account of robust growth in Brands & Retail businesses and capacity expansion in woven fabrics. We should be able to maintain the operating margins as we expect the cotton prices to remain stable at the current level.”
As mentioned earlier, textile business grew by 18 per cent, whereas the denim business declined by 8 per cent. “We are seeing inventory corrections taking place in denim across the globe and the people were expecting the price fall, which has happened now”, Mr. Shah said.
As far as brand and retail is concerned the company had once again an excellent growth of 46 per cent, out of which 25-30 per cent of the growth was on account of volume and the balance on account of price increase.
The company is expanding capacity during the second half of the current financial year for woven fabric, shirting, and khaki. “We are quite confident that we will achieve our target of close to Rs. 5,000 crores top line this year”, said Mr. Shah.
“As far as denim is concerned, we are seeing the demand for denim fabrics actually starting to become normal, because the prices of fabrics have become stable on account of stable cotton prices and we don’t see cotton prices now going down further. So, we think that we should be going back to our 100% utilization of denim some time in December onwards. So starting December through March we should see a significant growth in our denim volume going up to about 8.5 to 9 million every month”, added Mr. Shah.