Arvind Ltd., one of the largest integrated textile, apparel and branded apparel players, is now relying on advanced materials and the technical textile segment as a new growth engine.
Mr. Jayesh Shah, Director & Chief Financial Officer, said: ìWe have made investments in manufacturing technical fabrics in a small way and experimenting with some of the industrial and functional fabrics which go into the manufacturing of fire-retardant and bullet-proof fabrics.
Arvind has recently signed a joint venture agreement with PD Fibre Glass Group of Germany for manufacture of glass fabrics in India. Fabrics made out of glass fiber are primarily used for making wind blades, and commercial production is expected to commence in April.
We are also currently studying a project of non-woven fabrics used for making tissues and other things. We are looking at this as a next area of growth for us. Our plan is that this business would grow upto Rs. 500 crores in three years time, said Mr. Jayesh Shah.
Arvind has registered an 8 per cent growth in consolidated net profit from ordinary activities of Rs. 52 crores. Its revenue increased 19 per cent to Rs. 1,190 crores while EBIDTA improved 40 per cent to Rs. 180 crores. The growth in profits came even after writing off Rs. 38 crores foreign exchange losses during the quarter.
Net profit after extraordinary income stands at Rs. 243 crores as the company earned extraordinary income of Rs. 191 crores (net of tax) from sale of its stake in the JV company VF Arvind Brands Pvt. Ltd.
Commenting on the results as well as outlook of the company, Mr. Jayesh Shah observed: ìThe revenue growth of 32 per cent in branded apparel and retail business segments and 21 per cent revenue growth in textile business were the key drivers for improved financial performance at the consolidated level. We hope to achieve 18 per cent growth in revenue during the current financial year. While cotton prices have softened, the selling prices have adjusted downwards ahead of full benefit of lower cotton prices which may marginally impact the operating margin in the fourth quarter. While its established business continues to do well, the company is focusing on advance materials and the technical textile segment as the new growth engine.
Textile revenue grew by 21 per cent led by 27 per cent growth in denim and 17 per cent growth in shirting/khaki fabrics. The company sold 23.6 million metres of denim and 17.6 million metres of shirting/kakis in the third quarter of 2010-11.
The companyís denim capacity continues to be about 108 million metres, and the shirting capacity would be now 84 million metres. For the current year, Arvind Mills has made total capex of Rs. 350 crores, which included Rs. 200 crores for capacity expansion in shirting business.
Arvind’s key brands are Arrow, US Polo and Flying Machine. Across the board there has been a growth of 25-40 per cent, the highest growth of course is in US Polo where the growth is 44 per cent, according to Mr. Jayesh Shah.