Arvind net zooms threefold

Arvind Ltd today said its fourth-quarter consolidated net profit rose more than threefold to Rs 63 crore from Rs 20 crore in the year-ago period. It attributed the growth to strong volume and price growth in the textile, and brands and retail business.

Consolidated revenue for the three months to March advanced by 59 per cent to Rs 1,201 crore from Rs 756 crore a year earlier. Earnings before interest, taxes, depreciation and amortisation (Ebitda) jumped 84.5 per cent to Rs 179 crore.

For the full year, the company logged 230 per cent growth in net profit at Rs 165 crore, compared to Rs 50 crore in 2009-10. Revenue rose 25 per cent to Rs 4,090 crore from Rs 3,261 crore, while Ebitda jumped 36 per cent to Rs 556 crore from Rs 410 crore.

“The revenue growth of 47 per cent in branded apparel and retail business segments and 20 per cent in the textile business were the key drivers for such an impressive financial performance at the consolidated level,” the company said in a statement.

“Arvind achieved a major millstone of crossing an annual revenue of Rs 4,000 crore in 2010-11. We have not only achieved robust revenue growth, but also improved operating profit margins despite sharp increase in input costs, which vouches for our ability of increasing selling prices in both domestic and international markets. 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,” said Jayesh Shah, director and chief financial officer of the company.

The company aims to achieve an annual turnover of Rs 8,000 crore by 2014-15.

The company board approved the merger of Arvind Products Limited (APL), a listed firm, with the parent company, Arvind. Arvind holds a 54 per cent stake in APL. “The share exchange ratio as approved by the board is one share of Arvind for 11 shares of APL,” the company said. Consequent to merger, the share capital of Arvind will increase by Rs 3.41 crore.

“We had an agreement with lenders due to which we couldn’t merge APL with Arvind. After a decade, we could now merge it since we have fulfilled all obligations,” said Shah.

APL manufactures cotton yarn, woven khakhi fabrics and traditional voils. Yarn and khakhi units have significant linkages with the parent company, Arvind, and hence, the proposed merger is expected to bring significant operational synergy.