Arvind Ltd.’s future growth will be built on two main drivers – domestic consumption in apparel & branded retail as well as large global opportunity in textiles & clothing world trade. The company is expected to grow around 20-22 per cent in the next five years. However, the growth will be driven by its B2C business model.
In the Brands & Retail space, Arvind has built a breakthrough growth portfolio of Power Brands & Specialty Retail. With such a strong portfolio of brands & retail format, the company is well poised to achieve CAGR of over 25 per cent in the next five years. To achieve this goal, the company is making category extension of its existing brands and rapid expansion of its distribution footprint. During the period, the company is planning to cover almost 300 cities with over three million square feet retail space.
In textiles, the company is driving the growth through asset-light garmenting business as part of its vertical integration strategy so as to capture entire values in the textile chain. It is also expanding its knit fabrics capacity after having raised the woven fabric capacity in recent times. The textile business is expected to maintain a 10-12 per cent growth rate.
Arvind, having made a foray into technical textiles business, is now looking at growing this business through joint venture with global companies which bring the technology or have access to international customers. The company has also worked out a strategy of building E-Commerce platforms and is looking to develop multiple ‘differentiated online formats’ to play in E-Commerce space.
For the financial year 2015-16, the company revenue at the consolidated level is expected to grow by around 15-17 per cent driven by around 24-26 per cent growth in Brands & Retail business and 9-11 per cent in Textile business.
In 2014-15, the denim business had muted growth in volume at 106 million mtrs. Woven fabrics business achieved eight per cent growth in volume at 112 million mtrs, the highest-ever so far.
Garments, which is part of Arvind’s verticalisation strategy, continues to keep the growth momentum. During the year, garments business registered growth in revenue of three per cent.
Arvind manufactures jeans, shirts & knitted garments at its plants situated in around Bangalore. It has also set up a JV plant for manufacturing suits.