Prices are set to change for Arvind's products post GST - some of its apparel set to go cheaper, while others will get marked up. 

The company's Brand and Retail Segment pre-GST attracted a tax rate of around 11%. Post GST, taxes on products with transaction value greater than Rs. 1000 will attract 12% GST, while for those under Rs. 1000 would have a 5% tax rate. 

Apparel costing less than Rs 1000 constitute 20% of the company’s total portfolio. The company is planning to pass on the additional 2% levy on more expensive products to customers. Arvind brought its end of season sale up ahead to sell off excess inventory, but aside from that analysts including Motilal Oswal expect the impact of GST to be not too significant on Arvind, and have not revised target prices substantially.

However there are a couple of clear benefits and challenges. Arvind will gain from the unorganized textile sector coming under the tax net, which will reduce price differentials between its branded offerings and these unbranded segments. Arvind will however come under margin pressure for its price-sensitive B2C segment, and might have to swallow the impact, affecting its EBITDA in the coming quarters. In the next two quarters, Arvind is also expected to see lower profits as its new Ethiopia facility comes online, as it takes time for utilization to reach a cost-effective level.