Arvind Fashions witnessed a 3.5 percent increase in its stock price, reaching a 52-week high of Rs 383 per share on November 8, following the company’s strong performance in the July-September quarter of FY24. Meanwhile, the S&P BSE Sensex remained relatively flat at 64,029 levels as of 10:05 am.
Over the past three months, this fashion retailer’s stock has soared by 14 percent, outperforming the benchmark Sensex, which experienced a 1 percent decline during the same period.
The company reported a 7 percent year-on-year (YoY) increase in revenues, reaching Rs 1,267 crore in Q2FY24, driven by its retail and multi-brand outlet (MBO) segments. Additionally, Arvind Fashions achieved its highest-ever profit performance of Rs 22 crore in Q2FY24, marking a 19 percent YoY growth.
The management attributed these positive results to sharp execution in the retail channel, the introduction of premium offerings across renowned brands, and a well-defined strategic focus.
Furthermore, Arvind Fashions recorded its highest-ever quarterly earnings before interest, tax, depreciation, and amortization (EBITDA) performance, with an 11 percent YoY increase. Consequently, the EBITDA margin expanded by 50 basis points (bps) YoY in Q2FY24.
Previously, analysts at Systematix Institutional Equities initiated coverage on the company, recommending a ‘buy’ rating for Arvind Fashions with a target price of Rs 515 per share.
The brokerage firm highlighted that a combination of capital raises, portfolio rationalization, and margin improvement had enabled the company to recover from its challenging past. Improved inventory turnover and a debt-free status by FY26 were expected to further enhance the company’s return ratios, which were already top-tier in the apparel industry. The firm projected a compounded annual growth rate of 12 percent for revenue, 24 percent for EBITDA, and 96 percent for PAT over FY23-25E, with a RoCE of 21.6 percent for FY25E.
Arvind Fashions boasts a strong presence in the lifestyle sector, featuring a robust portfolio of fashion brands catering to various categories and price points, including US Polo Association (USPA), Arrow, Tommy Hilfiger (Tommy), Calvin Klein (CK), Flying Machine, and Sephora.
