Arvind Mills.

Price on 13/02/98: Rs 55.6

Price on 20/02/98: Rs 51.25

The scrip of Arvind Mills has been a consistent loser and this week was further beaten down to a 52 week low at Rs 51. It has lost 7.8 per cent in the last one week. This adverse reaction has been due to the inventory pile up to the tune of Rs 125 crore. Sluggish export demand for denim, especially in the US and UK has aggravated the situation. Around Rs 35-40 crore worth stock is lying with distributors unsold. Converters are holding around Rs 15-18 crore worth stock, while Rs 30 crore stock of Newport Jeans is lying with the company. The situation has been worsened with the devaluation of the currencies in the South East Asian countries. And on the flip side, any benefits accruing through depreciation of the rupee have been offset by the decline in denim prices. The initial downtrend was due to the companys vulnerability to the fluctuations in the cotton prices. The rise in the cotton prices is expected to increase the cost of procurement for the company by 10-12 per cent this season. These factors are bound to have a negative influence on the companys performance in 1997-98 and the half yearly results have not been impressive.