Arvind Ltd Q2 net profit grows 58 per cent

AHMEDABAD: Vertically integrated textile player Arvind Ltd registered 58% growth in consolidated net profit for the quarter ended September 30. The company earned consolidated net profit of Rs 62 crore against Rs 39 crore recorded in the corresponding quarter of the previous year on account of improvement in EBITDA margin, it said in a press statement. The consolidated revenue for the quarter is up by 23% at Rs.1,256 crore as against Rs1,025 crore in the corresponding quarter of the previous year.

At the operating level, consolidated EBITDA increased by 40% at Rs.178 crores as against Rs. 128 crores for the corresponding quarter of the previous year.

The revenue growth of 46% in branded apparel and retail business segments and 18% revenue growth in textile business was the key driver to growth. Jayesh Shah, director & CFO 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 to 12 mm by January 2012 from current 72 mm. We should be able to maintain the operating margins as we expect the cotton prices to remain stable at the current level.”

Although the company is currently using 95% of its 108 mm denim capacity on back of poor demand from international buyers, it is bullish on the domestic market. “We would continue to focus on the fabric and retail businss in India,” Shah told ET.