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Lockdown-hit Arvind Ltd posts Q1 consolidated loss before tax of Rs 156 cr

Consolidated income during the quarter fell by nearly 69 per cent to Rs 603.22 crore from Rs 1,917.21 crore in Q1 of FY20

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Arvind Ltd | Q1 results | Lockdown

Vinay Umarji  |  Ahmedabad 

textile, arvind, manufacturing, msme, jobs
Arvind's consolidated income during the quarter fell by nearly 69 per cent to stand at Rs 603.22 crore as compared to Rs 1,917.21 crore in Q1 of FY20.

Taking a hit during the Covid-19 pandemic-led lockdown, textile and apparel conglomerate has posted a consolidated loss before tax (LBT) of Rs 156.10 crore for the April-June quarter in fiscal year 2020-21, based on the company's filing on exchanges on Monday. The company had posted a profit before tax (PBT) of Rs 40.71 crore in the same quarter last year.

Arvind's consolidated income during the quarter fell by nearly 69 per cent to stand at Rs 603.22 crore as compared to Rs 1,917.21 crore in Q1 of FY20. According to Arvind Ltd, its earnings before interest, tax, depreciation and amortization (EBITDA) was at a negative Rs 29 crore. However, its June/July numbers indicate recovery of revenues to around 60 per cent of previous year and an EBITDA of 11 per cent, the company stated on Monday.

"As a result of lockdown, the volumes for the current quarter is impacted. Revenue from operations and profitability has decreased due to Covid-19 related market volatility," the company said in a statement to stock exchanges.

However, the company also stated that recovery had begun among its various business segments by June and July when began being lifted up across the country in phased manner.

For instance, 's denim volumes recovered to around 70 per cent in July with export volumes recovering fully even as domestic continued to lag. On the other hand, its woven volumes recovered to 64 per cent in July with the same expected to ramp-up further in Q3.

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While monthly garment volumes recovered to roughly 60 per cent by June, advanced materials' monthly revenues and margins have fully recovered to pre-Covid levels, stated. The company has undertaken a multi-pronged program resulting in long term fixed cost reduction of 15 per cent with its net borrowing likely to return to March end levels by end of the second quarter this fiscal. Its net borrowings rose from Rs 2371 crore as on March 31, 2020 to Rs 2702 crore as on June 30, 2020.

Arvind Ltd.'s cash accruals had also turned positive by June, the company stated in a presentation to stock exchanges. "Average price realisation for denim has improved to Rs 205 per metre, whereas wovens have seen a slight erosion to Rs 168 a metre," the company stated.

Meanwhile, for the potential revival during July-September quarter in the current fiscal, the company is pinning its hopes on recoveries in denim and garments businesses, apart from wovens.

"Revival in July-September would be based on denim and garments returning to 75-80 per cent levels and wovens to 55-60 per cent," the company stated while adding that the third quarter of October-December is expected to grow by further 10 per cent over the July-September quarter.

First Published: Mon, August 31 2020. 20:22 IST
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