Revenue growth for Arvind's textile business in the most recent quarter was fuelled by the garments and woven segments - garments in particular grew by 38% YoY in its most recent quarter. The company took a beating overall in its Q3FY17, owing, management said, due to demonetization hitting cash availability in trade channels, particularly denim. An increase in cotton prices (up 20% YoY) coupled with higher employee expenses also hit the company's consolidated EBITDA margins, which fell  to 10.1% versus the expected 11% for Q3.  

The fundamentals, Arvind says, are strong. The firm has matured its local production for its core brands, and focused on local sourcing to bring down costs. The company also has a wide distribution footprint across multiple channels, making it a preferred partner for international brands entering the Indian market. A youthful demographic (median age in India will be just 29 in 2020), rising urbanization and access to info on trends is is increasing loyalty towards branded merchandise, according to the firm. As a result, it expects its apparel market to grow in double digits till 2020.

Arvind has stayed away from full vertical integration due to margin challenges in the spinning and weaving segments - the margins here are extremely low, and the company expects to continue relying on external suppliers. Instead Arvind has focused on textile processing, to lower costs overall.

The management says it expects to open 150 new retail stores every year. The company is continuing its focus on specialty brands like Sephora and GAP, which it is counting on for margin growth in FY18. Share price for the firm has been trending up, on expectations of growth recovery with year-end results.