Arvind Ltd. share price target

Arvind reported healthy revenue growth of 17.6% YoY on consolidated basis in Q1FY18 led by strong growth in brands business. EBITDA margin however came in weaker than expected (370bps YoY to 8.4%) knocked down by higher cotton prices coupled with rupee appreciation and...

Despite GST-led disruption which led to wholesalers de-stocking, EBITDA margin in Brands & Retail division (32% of revenue) improved 60 bps YoY. This was offset by strong INR and adverse raw material prices which resulted in 370 bps decline in EBITDA margin of the textile division (64% of revenue).

Revenue grew by 0.41% to Rs. 2475.03 Cr in Q1FY18 when compared to the previous quarter. Revenue grew by 0.41% to Rs. 2475.03 Cr in Q1FY18 when compared to the previous quarter.

We initiate coverage on Arvind as a BUY with a SOTP price objective of

Revenue grew by 5.54% to Rs. 2464.82 Cr in Q4FY17 when compared to the previous quarter.

Arvind's Brands& Retail division's strong performance in Q4 (22% YoY rev growth; EBITDA margin doubled to 7%) was offset by muted performance by the Textile division (EBITDA margin declined 260 bps).FY17 EBITDA (flat YoY at Rs 9.4 bn) was impacted due to higher investments in online business.

Arvind Ltd is the flagship company of the Lalbhai Group, established in 1931. Arvind's business is broadly classified into Textiles, Brand & Retail and others. Textiles, Brand & retail and others which accounts for 61%, 32% and 7% of the revenue respectively. In India, Arvind sells international brands such as Arrow, US Polo Associate, Tommy Hilfiger (JV brand), Calvin Klein (JV brand), IZOD, Elle, Cherokee, GANT, Hanes, Billabong, Wonderbra, Ed Hardy, Geoffrey Beene, Nautica etc. Company has a strong distribution network of 1,014 stores with a retail space of ~1.63mn sq.ft. (Brands: 928 stores with ~0.90mn sq.ft retail space & MegaMart: 86 stores...

ICICI Securities Ltd | Retail Equity Research Arvind's Q4FY17 consolidated revenues were marginally above our estimates. However, profitability slightly missed our estimates Revenues for the quarter grew 10.4% YoY to | 2464.8 crore (I-direct estimate: | 2409.3 crore). Growth was fuelled by 22% YoY growth in its brand & retail segment, which came in at | 829.2 crore. Standalone...

Management confident of its 5 year vision for Arvind Brands and Retail (60% of our SoTP): Rs 90 bn topline by FY22 (~24% CAGR) with EBITDA margin at ~13% (5.5% in FY16) and improving RoCE to 40%.