Arvind Limited Reports Strong Recovery In Q2 FY25, Expects Continued Growth In H2

Arvind Limited has announced its financial results for the second quarter and half-year ended September 30, 2024, demonstrating a solid recovery from the challenges faced in Q1 FY25. The company achieved improved operational performance across segments, supported by stable raw material costs and an optimized product mix, despite ongoing geopolitical uncertainties and macroeconomic challenges.

Key Business Highlights – Q2 FY25

• Denim Volume: Reached the highest level in nine quarters with ~90% utilization.
• Woven Segment: Achieved 11% growth, producing 32.7 million meters with near 100% utilization.
• Garmenting Division: Surpassed 9 million units, reflecting 21% growth and sequential improvement in realizations.
• AMD Division: Recorded 10% volume growth, although slower recovery in Human Protection and order deferments in Mass Transport impacted the overall performance.

The textile division’s growth was attributed to new customer acquisitions and increased demand, showcasing the success of Arvind’s vertical integration strategy.

Financial Performance – Q2 FY25

• Consolidated Revenue: Rs 2,188 crore, up 14% YoY.
• EBITDA: Rs 221 crore, with a margin of 10.1%, up 7% YoY.
• ‘Textile Division Revenue: Rs 1,633 crore, marking the highest revenue in nine quarters, with an EBITDA of Rs 168 crore and a 10.3% margin.
• AMD Revenue: Rs 388 crore, up 9%, with an EBITDA of Rs 60 crore (15.3% margin).
• Profit Before Tax (PBT): Rs 135 crore, up 20% YoY.
• Profit After Tax (PAT): Rs 60 crore, impacted by a deferred tax adjustment. Without this, adjusted PAT would have been Rs 97 crore.
• Capital Expenditure (Capex): Rs 167 crore spent in H1 FY25.
• Net Debt: Increased by Rs 58 crore, with minor loan carryover from Q1.

The company reported a 150 basis point improvement in ROCE, which reached 13.9%.

Arvind expects sustained growth momentum in the second half of FY25, supported by a robust textile order book. The AMD division is projected to achieve 20% volume growth on a run-rate basis. With accelerated capex programs, the company anticipates a total capex spend of Rs 400-Rs450 crore by FY25 year-end. Long-term debt is expected to settle around ₹400 crore by the close of FY25.

Arvind Limited’s Q2 performance reflects its recovery trajectory, and the company remains optimistic about meeting its FY25 growth targets while improving margins. The focus remains on achieving a targeted ROCE profile of 20%+ and creating value for stakeholders through sustained investments and operational efficiency.