Arvind Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Arvind's consolidated revenues in Q3FY17 grew 14.8% YoY (flattish QoQ) to | 2335.5 crore (I-direct estimate: | 2326.3 crore). Growth was fuelled by 24% YoY growth in its brand & retail segment, which was at | 764.5 crore. Additionally, standalone textile business contributed to growth with revenues of | 1402.2 crore (up 7.9% YoY) Power' brands (excluding Tommy Hilfiger) grew 14% YoY to | 395 crore (3.6% LTL). Also, Unlimited reported significant growth of 32%...

ICICI Securities Ltd | Retail Equity Research Arvind's consolidated revenues for Q2FY17 grew 19% YoY (up 11% QoQ) to | 2331 crore (I-direct estimate: | 2296 crore). Majority of the growth was derived from the brand & retail business, which grew 33% YoY (up 36% QoQ) to | 752 crore. However, textile business remained flattish sequentially (up 9% YoY) to | 1427.5 crore Brand & retail growth momentum was mainly contributed by 31% growth in Power' brands (excluding Tommy Hilfiger). Unlimited too...

Arvind Ltd, has divested 10 per cent stake in its subsidiary Arvind Lifestyle Brands to a private equity firm called Multiples for INR 740 Cr giving a value of INR 7,400 Cr to Arvind's Brand & Retail.

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 1,047 stores with a retail space of ~1.66mn sq.ft. (Brands: 954 stores with ~0.94mn sq.ft retail space & MegaMart: 93 stores...

Arvind has witnessed a steady rise in revenue share from its brand and retail business, which has grown by a healthy 23% CAGR over FY11-15. The company is also looking to expand its product range with focus on the speciality retail like GAP, The Children Place and Aeropostale. Higher contribution from fast growing Brands and Retail business is likely to boost the company's overall revenue and profit growth going forward.

Outlook : Technically, sharp swings are usually followed by consolidation and we’ve been seeing the same in Arvind for last one year. It’s trading within 235-350 price band while sustaining above its long term averages, indicating accumulation. And, it now looks all set for fresh break and to resume uptrend. Traders should go ahead and accumulate in the given range of 328-334 with close below stop loss of 304 for the target of 400.

Arvind’s Q1FY17 consolidated revenue grew 18% YoY (down 9% QoQ) to | 2104 crore (I-direct estimate: | 2100 crore). Due to implementation of IND-AS, it reclassified its segments, following which fabric retail (The Arvind store) would now be a part of standalone business. However, earnings from brands like Tommy Hilfiger, premium wholesale garments (Calvin Kline), etc, where Arvind does not have controlling interest, would now directly form part of PAT • Revenue from brand & retail grew 26% YoY to | 553 crore. Revenues from ‘Power’ brands (excluding Tommy Hilfiger) grew 27% YoY to | 300 crore. EBITDA margins for the same were at 10% compared to 9.6% in Q1FY16. Following the effect of store closures, “Unlimited” revenues de-grew by 7% YoY. ICICI Securities Limited continue to maintain BUY recommendation with a target price of | 370.

Trendlyne has 7 reports on ARVIND updated in the last year from 2 brokers with an average target of Rs 367.5. Brokers have a rating for ARVIND with 1 price upgrade in past 6 months.

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 69%, 28% and 3% 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 998 stores with a retail space of ~1.6mn sq.ft. (Brands: 903 stores with ~0.87mn sq.ft retail space & MegaMart: 95 stores...

Revenues in line with estimates: Arvind's (ARVND) reported revenues of INR21b (est. of INR21.3b) for 1QFY17 grew 17.8% YoY, led by strong 26% YoY growth in the brands & retail (B&R;) business to INR5.5b (LTL growth of 4.3%) and 14% YoY growth in the textiles business. EBITDA margins for 1QFY17 stood flat YoY at 11.5% (est. of 12.5%) due to business mix change in favor of branded apparels, but margins in both the segments expanded. Adjusted PAT stood at INR735m (est. of INR788m), as against INR572m in 1QFY16. Ind-AS key adjustments: With respect to goods sold on Sale or Return (SoR)...

Arvind Ltd, (AL) is the largest textile company in India and is a part of the Lalbhai group. AL was the pioneer in the denim space in India and entered the export market for Denims in 1987-88. Currently it is the leader in the denim manufacturing space and supplies to customers like GAP, Lee, Wrangler, Levi's etc. Apart from denim, AL has also emerged as a leading manufacturer in the woven space (with customers like Madura Garments, Marks & Spencers etc.) and is now enhancing its presence in the garmenting segment (which has customers like GAP, Tommy Hilfiger, Calvin Klein etc). Apart from the textile space, AL has also developed a highly successful brand and retail business and boasts...