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Arvind Ltd. Stock Analysis

Small Cap
Evaluated by 3237 users | BSE: 500101 | NSE: ARVIND |
Textile
Arvind Limited started in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 8.23%10.84%11.7%13.24%11.07%9.2%8.25%6.4%6.98%5.77%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 4,0854,9255,3886,9487,8517,9939,2216,7947,1917,369
Y-o-Y Gr. Rt.-20.6%9.4%29%13%1.8%15.4%-26.3%5.8%2.5%
Adjusted EPS (Rs.) 5.58.7211.616.8713.8712.2612.6312.1811.065.11
Y-o-Y Gr. Rt.-58.6%33%45.4%-17.8%-11.6%3%-3.6%-9.2%-53.8%
Book Value per Share (Rs.) 54.4768.3176.5889.4195.07103.66137.57145.76105.87104.22
Adjusted Net Profit 140222299435358317326315286132
Net Op. Cash Flow (Rs. Cr.) 1973354903885586505514282,358860
Debt to Cash Flow from Ops 11.236.355.027.716.085.875.317.761.142.85
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Arvind Ltd. should be analysed on a Consolidated basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 6.8%-1.3%-7.2%2.5%
Adjusted EPS -0.8%-18.1%-26%-53.8%
Book Value per Share 7.51.9-8.8-1.6
Share Price -7.8% -33.2% -55% -6%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 9.411.9313.9818.0113.511.7310.458.578.764.85
Operating Profit Margin (%) 12.9712.4814.8215.0113.0912.3110.4610.1910.719.64
Net Profit Margin (%) 3.444.515.556.254.523.923.584.6941.78
Debt to Equity 1.61.221.251.31.381.430.820.880.990.91
Working Capital Days 175175187185196192162273230157
Cash Conversion Cycle 666269697775641038355
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 44.72%
Institutions 18.95%
Non-Institutions 36.33%
Pledged *10.549.919.879.879.879.654.060.390.390.39
* Pledged shares as % of Promoter's holding (%)
Data is not available for this company.

The 5-year analysis of Arvind Ltd.'s performance infers:

Arvind Ltd. earnings have declined by -18.1%, whereas share price has depreciated -33.2% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Arvind Ltd. share prices over the last 10 years. Here is what we found out:

Arvind Ltd. share price has depreciated -2.6% annually over the past ten years.

Arvind Limited started in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs 45.76

Arvind Limited started in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs 45.76 lakh and profits were Rs 2.82 lakh. Steadily producing high quality fabrics, year after year, Arvind took its place amongst the foremost textile units in the country.

In the mid 1980’s the textile industry faced another major crisis. With the power loom churning out vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the verge of closure. Yet that period saw Arvind at its highest level of profitability. There could be no better time, concluded the Management, for a rethink on strategy. The Arvind management coined a new word for it new strategy – Reno vision. It simply meant a new way of looking at issues, of seeing more than the obvious and that became the corporate philosophy.

The national focus paved way for international focus and Arvind’s markets shifted from domestic to global, a market that expected and accepted only quality goods. An in-depth analysis of the world textile market proved an eye opener. People the world over were shifting from synthetic to natural fabrics. Cottons were the largest growing segments. But where conventional wisdom pointed to popular priced segments, Reno vision pointed to high quality premium niches. Thus in 1987-88 Arvind entered the export market for two sections -Denim for leisure & fashion wear and high quality fabric for cotton shirting and trousers. By 1991 Arvind reached 1600 million meters of Denim per year and it was the third largest producer of Denim in the world.

In 1997 Arvind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in India, at Santej. With Arvind’s concern for environment a most modern effluent treatment facility with zero effluent discharge capability was also established. Year 2005 was a watershed year for textiles. With the muliti-fiber agreement getting phased out and the disbanding of quotas, international textile trade was poised for a quantum leap. In the domestic market too, the rationalizing of the cenvat chain and the growth of the organized retail industry was likely to make textiles and apparel see an explosive growth.

Arvind has carved out an aggressive strategy to verticalize its current operations by setting up worldscale garmenting facilities and offering a one-stop shop service, by offering garment packages to its international and domestic customers. With Lee, Wrangler, Arrow and Tommy Hilfiger and its own domestic brands of Flying Machine, Newport, Excalibur and Ruf & Tuf, Arvind set its vision of becoming the largest apparel brands company in India.

In March 2011, Arvind Mills had inked pact with Birla Cellulose, an Aditya Birla Group firm, to create the world’s softest denim fabric for women. This step mark’s its foray into the women’s wear segment. In May 2011, Arvind and Tata Housing Development, India’s leading real estate development company, have entered into a strategic partnership. The two conglomerates have floated a 50:50 joint venture to develop an integrated township project spread over 134 acres near Ahmedabad.

Business Division

Denim- Arvind is a leading producer of denim worldwide. Design, Innovations and Sustainability have been its core competency and have played a key role in its success. The use of sophisticated ultramodern technology under the guidance of world-renowned designers has enabled Arvind to deliver many firsts in the international markets. All its products are designed and modeled on the basis of expert design inputs coming from our designers based out of India, Japan, Italy and the United States. All Arvind Denim products come with the hallmark of distinctiveness and quality. The denim facility at Arvind is accredited with ISO 9001, ISO 14001, OEKOTEX 100, GOTS, and Organic exchange standard. Our labs are certified by NABL (ISO 17025 certification) and customers like Levi’s, Lee, and Wrangler etc.

Woven Fabrics- Shirting & Bottom weights: Arvinds’ shirting fabrics have consistently fetched a premium in the local and international markets. Its state of the art facility is capable of producing a total of 65 million meters per annum of Shirting and bottom weight fabrics. The product range is certified by Oekotex, and processes are certified by GOTS for producing Organic products, the company is certified producers of Lycra and Teflon based varieties, while its laboratory is accredited by Marks and Spencers, Next, Gap Inc., Levi's, DuPont and INVISTA.

Voiles: Arvind has been well poised as a leading manufacturer of super fine fabrics in India. An uncontested market-leader in the manufacture of voiles, Arvind still continues to manufacture the traditional fabric for both domestic and international markets. Arvind’s voiles are primarily used as blouse material and are sold in the domestic market through an impressive network of around 150 dealers, reaching over 5000 retail outlets throughout India. High quality Swiss voiles are exported to Switzerland, Sri Lanka and countries in the Middle East.

Knits Fabrics- Arvind’s knits department has an annual knitting capacity of 5,000 tons. The knits vertical has a fabric dyeing capacity of 5000 tons per annum and yarn dyeing capacity of 1800 tons per annum. It has the ability to process both tubular and open-width fabrics and offers specialty finishes like mercerization, singeing and various forms of brushing and peaching.

Garment Exports- A world without boundaries is a promise of a global marketplace. At Arvind, its range of fabrics is universal in appeal. The company aim to inspire a diverse mix of customers enriching lifestyles globally. It has successfully established itself as a one-stop shop for apparel solutions catering to an array of national and international clients.

Advanced Materials- The Company has created the Advanced Textiles Business. Building further on its legacy of innovation, it has brought a new level of sophistication to manufacturing fabrics. Its Pro1 range of branded fabrics and composite textiles includes solutions for growing industrial sectors like Personal Protection, Industrial Filtration, Wind Energy, Defense, Auto Components, Transportation, and Housing & Infrastructure.

Arvind Brands- Arvind is amongst a few organizations worldwide with a portfolio of brands that are as distinctive and relevant across diverse consumers. At Arvind, brands work across multiple channels, price points and consumer segments. The expanse of the Arvind brandscape is spread across the Indian market with around 273 standalone brand stores in addition to 975 counters selling through key accounts and multibrand outlets across India.

Mega Mart Retail- Arvind runs India's largest Value Retail Chain - Megamart. The MegaMart format offers a unique and differentiated proposition to the consumers. It offers mega brands at amazingly low prices and provides a retail experience of a high-end department store. The Megamart stores range in size from 2000 sq ft to 65000 sq ft. The larger stores are called Big Megamart and there are 6 such stores across Bangalore, Chennai, Pune and Mumbai. The smaller formats spreads across the country are 205 in number. Megamart is expanding rapidly and is expected to be a Rs. 1000 cr chain within the next two years. The brands sold exclusively in Megamart include : RUGGERS - SKINN - ELITUS - DONUTS - KARIGARI - MEA CASA - AUBURN HILL - BAY ISLAND - COLT - LEISHA- EDGE.

The Arvind Store- After decades of ruling the national and international fabric markets, Arvind has now introduced The Arvind Store, a unique concept in fabrics and apparel retail. The Arvind Store bring together, under one roof, the best that Arvind has to offer. It is a convergence of three of Arvind’s strongest capabilities, the best of fabrics from Arvind’s textiles division, leading apparel brands from Arvind Brands and bespoke styling solutions based on the latest garment styles from Arvind Studios. In a world where bespoke tailoring meets cutting edge fashion, The Arvind Store will create a shopping experience to rival the best in the Indian Marketplace.

Engineering- ANUP Engineering:  The Anup Engineering Limited (established in 1963), is the flagship Engineering Company of the Lalbhai Group, and is a subsidiary of Arvind Limited. It is an accredited ASME “U” & “NB” stamp and ISO-9001: 2008 certified company, conforming to specified standards. Anup has extensive experience in working with critical metallurgies like low temperature CS, NACE/HIC, low alloy, stainless steel, duplex, super duplex, monel, cupro nickel, etc. Anup is approved by IBR, CCOE & TDC certifications, and works closely with and under the surveillance of renowned national and international inspection agencies like Lloyds, BVI, DNV, EIL, Toyo Engineering, UHDE, and TUV etc.

ARVIND ACCEL: Arvind Accel Limited is a multi specialty Engineering Procurement and Construction Company. We provide customized engineering solutions starting from consultancy and design to the final implementation and commissioning of projects on a turnkey basis. Our certified support teams can also undertake complete operations and maintenance of a plant site or facility. We employ state of the art technology and equipment to provide unparalleled services for water, wastewater treatment and recycling projects.

Telecom-Arya Omnitalk: Arya Omnitalk is a 50:50 Joint Venture between India's highly reputed business houses, the J M Baxi Group & Arvind. The joint venture offers the following services - GPS based Fleet Automation & Management for City-wide Walky Talky services and Highway Traffic Management Solutions with CSSI.

Syntel: Syntel is a division of Arvind. With more than a million users as on date, Syntel has a dominant position in the Business Communication Solutions landscape offering a range of Analog and Digital EPABX based enterprise communication solutions for SMEs and leading Corporates.

Some of our esteemed clientele includes - Wipro, Whirlpool, Ashok Leyland, Blue Dart, Sahara Airlines, The Indian Armed Forces, State Bank of India, The World Bank, ICICI Lombard, etc.

Real Estate- Arvind’s recent foray into real estate has seen it become one of the prominent developers of the City of Ahmedabad. The company leverage its state of the art, sustainable construction techniques and engage the best architects to deliver high standards of excellence that Arvind is known for.

 

Milestones

1931 -The inception of Arvind Mills at the hands of three brothers - Kasturbhai, Narottambhai and Chimanbhai Lalbhai.

1934 - Arvind establishes itself amongst the foremost textile units in the country.

1980 - Arvind records highest levels of profitability. The new strategy – ‘Reno vision’, points at changing the business focus from local to global, towards a high-quality premium niche market.

1987-88 - Arvind enters the export market for Denims with a dual focus - Denim for leisure and Denim for fashion wear.

1991 - Arvind emerges as the third largest manufacturer of denim in the world.

1997 - India’s largest state-of-the-art facility for shirting, gabardine and knits is set up at Santej.

2005 - Arvind creates a unique one-stop shop service on a global scale, offering garment packages to reputed national and international customers.

2007 - Arvind expands its presence in the brands and retail segment by establishing MegaMart – One of India’s largest value retail chains.

2010 - Arvind launches The Arvind Store, a concept putting the company’s best fabrics, brands and bespoke styling and tailoring solutions under one roof. Arvind launches its first major Real Estate projects. Arvind becomes one of India’s largest producers of fire protection fabrics.

 

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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