Arvind net profit up despite sharp increase in input costs
Arvind limited, one of the largest integrated textile, apparel and branded apparel player have registered 218% growth in consolidated Net Profit for the quarter ended 31st March 2011. It has earned consolidated Net Profit of Rs. 63 Cr. as against Rs. 20 crores in the corresponding quarter of previous year on account of strong volume and price growth recorded by Textile and Brands & Retail businesses.
The consolidated revenue for the quarter is up by 59% at Rs.1201 crores as against Rs.756 crores in the corresponding quarter of the previous year. At the operating level, consolidated EBIDTA increased by 83% at Rs.179 crores as against Rs. 97 crores for the corresponding quarter of the previous year.
For the full year ended on 31st March 2011, the Company has recorded 230% growth In Net Profit at Rs. 165 crores as against Rs. 50 crores for the previous year ended on 31st March 2010.as a result of 25% growth in Revenue at Rs. 4090 crores as against Rs. 3261 crores for the previous year ended on 31st March 2010. At the operating level, consolidated EBIDTA for the year ended 31st March 2011, Increased by 36% at Rs.S56 crores as against Rs. 410 crores for the previous year ended on 31st March 2010.
The revenue growth of 47% in Branded Apparel and Retail business segments and 20% revenue growth in Textile business were the key driver for such an Impressive financial performance at the consolidated level. Within Textiles, Denim grew by 29% and Woven fabrics grew by 20%.
Commenting on the results as well as outlook of the Company, Mr. Jayesh Shah, Director & Chief Financial Officer said: "Arvind has achieved major millstone of crossing annual revenue of Rs. 4000 crore during this year. We have not only achieved robust revenue growth but we also improved the operating profit margins despite sharp increase in input costs which vouches for our ability of increasing the selling prices In both domestic & international markets.
“As this is the most exciting phase for Indian textile Industry as macro economic factors like increase in per capita Income, burgeoning middle class, rapid urbanization, increased organized retailing etc are driving the significant growth in Indian market for textiles & clothing. Arvind is fully geared to seize this never before opportunity with the strengths it has built over a period of time. We are also on track as far as our plans for unlocking the value of our land-bank which will lead to significant improvement in shareholders' value."
The Board of Arvind Limited has also approved the merger of Arvlnd Products Limited (APL), a listed company, with Arvind Limlted. Arvind Limited controls 54% equity stake in APL. APL is operating in textile business only comprising of cotton yarn, woven Khakhi fabrics and traditional Volls business. Yarn and Khakhi units have significant linkages with Arvind and hence the proposed merger will bring significant operational synergies leading to savings in costs for the combined entity. The share exchange ratio as approved by the Board is 1 share of Arvind Limited for 11 shares of APL. Consequent to merger share capital of Arvind Limited will increase by Rs. 3.41 crores.