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Arvind Ltd.

BSE: 500101 Sector: Industrials
NSE: ARVIND ISIN Code: INE034A01011
BSE LIVE 15:40 | 17 Nov 422.45 -0.70
(-0.17%)
OPEN

428.00

HIGH

430.60

LOW

420.00

NSE 15:58 | 17 Nov 422.30 -1.10
(-0.26%)
OPEN

430.00

HIGH

430.50

LOW

420.30

OPEN 428.00
PREVIOUS CLOSE 423.15
VOLUME 85032
52-Week high 461.95
52-Week low 321.60
P/E 43.42
Mkt Cap.(Rs cr) 10,923
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 428.00
CLOSE 423.15
VOLUME 85032
52-Week high 461.95
52-Week low 321.60
P/E 43.42
Mkt Cap.(Rs cr) 10,923
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Arvind Ltd. (ARVIND) - Chairman Speech

Company chairman speech

Dear Shareholders

2016-17 has been a very interesting year. Trump and Brexit grabbedpolitical headlines – in extreme interpretation even prompting questions about end ofwestern liberalism and clearly a mandate against globalization. Closer homedemonetization came as an unexpected shock to an economy preparing for arrival of thebiggest tax reform since independence. On the other hand technology and innovationcontinued their march and broke new grounds in diverse fields including Machine LearningArtificial Intelligence

Global apparel industry grew 3.6% in FY16 on the back of strong growthin Asia-Pacific. Trends in the apparel industry are changing rapidly with new-age apparelgaining ground. Modern apparel is coming packed with features and functionalities neverseen before – smart connectivity ultra-light weight active temperature managementmulti-dimensional super-stretch are the areas where manufacturers are pushing new bar.There is a clear trend in shift towards sports and sports inspired clothing – whichin turn requires specialty yarns such as performance polyester polyamides and spandex. Ingeneral I see cotton losing its predominance as the default fibre for making fabrics andapparel. While it still accounts for majority share in India the global trends alreadyreflect shift towards man-made fibres. On an overall basis these man-made fibres end upbeing more cost effective and environment friendly. One more reality is the global successof European fast fashion majors which is clearly impact the supply chain for many of theglobal brands.

At the retail end the transformation is even more pronounced. Onlineshopping accounts for over 20% of the US apparel sales. Retailers and brands especially inthe developed markets have been pushing for extreme personalization and a seamlessonline-offline experience. Apparel retail in India is also slowly moving online with ~9%of the apparel sales being done on internet. Unlike some of the other major marketsapparel and fashion is the leading category driving the adoption of ecommerce in India andcurrently contributes almost 30% to the total e-commerce in

India.

We at Arvind have always believed in being at the leading edge oftransformations impacting our businesses. Innovation always excites us and we continue toexperiment with new products technologies and business models. For instance our expandedapparel manufacturing facilities and the new plants in Ethiopia are designed to plugseamlessly into the global supply-chains of our customers at least total cost and bestsupply times. The patented

Neo process creates water-less dyed Indigo products which havesignificantly reduced environmental impact. During the year we launched Azurite which isour patented technology of premium saturated indigo fabrics.

Our brands and retail business is one of the most proactive adopters ofomni-channel commerce which enables our customers to create seamless offline-onlineshopping journeys.

This proprietary platform has already been rolled out to more than 600of our stores and we will be connecting many more stores in the current year.

In terms of business the US consumer market continued to remain steadywith soaring housing prices and low interest rates.

EU has been grappling with multiple years of slowdown. The

Chinese economy also has clearly cooled down. Apparel exports fromIndia remained flat although overall textiles exports from India fell during the yearprimarily on account lower yarn and fabric exports. Despite the impact of demonetizationin parts of Q3 and Q4 the domestic market grew by about 10% during the year. In thiscontext our key global accounts continued to remain strong provided helped our textilesbusiness grow by a healthy 10%. The brands and retail business delivered a market leadinggrowth of 26%.

Two key factors have been impacting the financial performance for allindustry players including Arvind. Firstly the cotton prices have unusually continued tostay high. This price movement is not driven by global demand and supply situation butpurely as a result of speculators holding on to their positions. Secondly the continuingstrength of the Indian currency impacts all exports adversely. Both these factors have hadand will continue to have a significant bearing on our financial performance as well.

Implementation of GST will bring few fundamental shifts in the textileand apparel retail market. While estimates vary we can safely assume at least 75% of theIndian apparel market today is unorganised. Once the initial hiccups related to GSTimplementation are resolved I expect the apparel retail industry to shift towardsorganised sector which augurs very well for players such as Arvind. Our value retailformat “Unlimited” has been doing extremely well for last few quarters and Iexpect an even better traction in the post-GST era.

Sustainability is central to our policies and practices – ourFundamentally Right philosophy guides our choices with regard to both environmental andsocial sustainability. Our innovative methods for conserving natural resources in ourfacilities got us multiple awards. We were also chosen as supplier of Zero

Liquid Discharge system by the Ethiopian government for their largestapparel manufacturing park at Hawassa. As a responsible corporate citizen our foundationruns the Gyanda program that provides a highly effective remedial education program for1200+ children from less privileged backgrounds. We also run four health-clinics incollaboration with Swasth that provide comprehensive healthcare services includingconsultation diagnostics and pharmacy – all for a small fee.

Change and adaptability is the key to success in the ever evolvingtextile and apparel market globally. I am confident that if we are able to adapt to thechanging market the future will be extremely rewarding for all our stakeholders. I takethis opportunity to thank all our partners and stakeholders for their continued supportand I look forward to an exciting journey ahead together.