Arvind Ltd.’s future is built on two parallel growth drivers – domestic consumption in apparel & branded retail and large global opportunities in textiles & clothing world trade. The company is expected to grow at 20-22 per cent in the next four-five years. However, the growth would be driven by its B2C business model which will constitute 35 per cent of revenue at the consolidated level.
Arvind’s revenue grew from Rs. 4,085 crores in FY 2011 to Rs. 7,851 crores in FY 2015. In the garments business it is planning to add capacity through greenfield and brownfield expansion projects.
The company is developing a large-scale dormitories-based garmenting model in India. In the wovens business, it is planning investments in processing and finishing for further strengthening its manufacturing infrastructure.
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 next 4-5 years. For the purpose, the company is making category extension of its existing brands and rapid expansion of its distribution footprint. It is also planning to cover almost 300 cities with over 3 million square feet retail space during the period.
In textiles, the company is driving the growth through the asset-light garmenting business as part of its vertical integration strategy so as to capture the entire values in the textile chain. It is also expanding its knits fabrics capacities after having expanded the woven fabric capacity in recent times. The Textile Business is expected to continue growing at 10-12 per cent.
Having made a foray into technical textiles Arvind is looking at growing this business in the coming years through joint ventures with global companies that either bring the technology or access to international customers. The company has also worked out a strategy for building E-Commerce platforms by developing multiple ‘Differentiated Online Formats’ to play in this space.
For 2015-16, the revenue of the company at the consolidated level is expected to grow by 15-17 per cent driven by 24-26 per cent growth in Brands & Retail business and that of 9-11 per cent in Textiles Business.
The garments business, which is part of Arvind’s verticalisation strategy, continues expanding. The company produces jeans, shirts and knitted garments at its plants in and around Bangalore city. It has also set up a plant for producing suits through the joint venture company, Arvind Goodhill Suit Manufacturing Private Ltd.