Arvind Ltd Announces Robust Q1 FY25 Results Despite Setbacks
Arvind Limited today reported its financial results for Q1 FY25, demonstrating resilience despite external challenges.
Key Financials:
Revenue: Rs 1,831 Cr (YoY Change: -1%)
EBITDA: Rs 150 Cr (YoY Change: -17%; Margin: 8.2%)
PAT: Rs 39 Cr (YoY Change: -40%)
The financial performance was notably impacted by the National general election and an illegal workers’ strike at the Santej factory, lasting 21 days. This unrest resulted in a revenue loss of approximately Rs 200 Cr and an EBITDA impact of Rs 60 Cr, including Rs 11 Cr in increased costs for air freight and additional worker expenses.
Despite these challenges, the Garmenting Division achieved a 25% YoY volume growth, driven by new customer additions and expansion into new knit garment categories. The AMD Division faced partial impacts from the strike, particularly in the Human Protection subsegment, and experienced order deferments in Mass Transport due to the election season.
Arvind maintained gross margins across its businesses, although the EBITDA margin declined due to reduced volumes and under-absorption of overheads. The Q1 results include revenue and EBITDA contributions of Rs 47 Cr and Rs 10 Cr, respectively, from the sale of land (Forreste Project), alongside a Rs 10 Cr cost impact from donations. The Textile Division reported revenue of Rs 1,350 Cr with an EBITDA of Rs 99 Cr, translating to a 7.4% margin, while the Advanced Material Division reported revenue of Rs 329 Cr with an EBITDA margin of 13.9%.
Arvind reduced its gross debt by Rs 55 Cr, although long-term debt increased by Rs 64 Cr due to a new Rs 150 Cr long-term loan, of which Rs 100 Cr has been repaid. Investment in growth capex has been slowed to preserve cash but is expected to resume fully by year-end.
The company received an “A-” rating in the CDP report on water security, placing it in the leadership band in India. Looking ahead, Arvind aims for low double-digit revenue growth, maintaining or improving margins and enhancing ROCE. Fabric volumes are expected to return to normal, with the Garmenting Division projected to achieve nearly 10 million pieces per quarter and 25% growth. The AMD segment is expected to recover losses and return to a 20% growth track in Q2 and Q3. The discretionary capex program of Rs 400-Rs 450 Cr for FY25 is on track. Arvind Limited remains committed to operational excellence and growth despite recent challenges.
