Hold Arvind, target price Rs 135: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has hold call on Arvind with a target price of Rs 135. The current market price of Arvind is Rs 118.25.

Arvind, incorporated in the year 1931, is a Small Cap company (having a market cap of Rs 3089.59 Crore) operating in Textiles sector.

Arvind key Products/Revenue Segments include Textiles, Export Incentives, Other Operating Revenue, Waste Sales and Sale of services for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 1893.09 Crore, down -4.97 % from last quarter Total Income of Rs 1992.11 Crore and down -14.47 % from last year same quarter Total Income of Rs 2213.30 Crore. Company has reported net profit after tax of Rs 97.17 Crore in latest quarter.

The company’s top management includes Mr.Sanjay S Lalbhai, Mr.Arpit K Patel, Mr.Nilesh Shah, Mr.Dileep C Choksi, Ms.Renuka Ramnath, Dr.Bakul Dholakia, Mr.Jayesh Shah, Mr.Kulin S Lalbhai, Mr.Punit S Lalbhai, Mr.Ismet Tehmesp Khambatta. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-03-2023, the company has a total of 26 Crore shares outstanding.

Near-term outlook for the textile business is weak due to the unfavourable global macro environment, while AMD business is expected to continue to deliver strong performance. Margin improvement would be dependent on softening of input costs. Having said that, the company is optimistic about its long-term growth prospects, aided by capacity additions in the textile and AMD businesses and emerging opportunities in the export market. A better mix and softening input prices would help profitability to improve consistency in the long term. The stock trades at 7.6x/5.5x its FY2024E/FY2025E EPS.

In view of near-term headwinds, the brokerage maintains its Hold rating on the stock with a revised price target of Rs. 135.

Promoter/FII Holdings
Promoters held 41.16 per cent stake in the company as of 31-Mar-2023, while FIIs owned 9.63 per cent, DIIs 8.58 per cent.