Arvind falls 11% on disappointing September quarter results

The stock dipped 11% to Rs 406 on the BSE after the company reported 9% declined in Ebitda at Rs 212 crore in September quarter

Arvind dipped 11% to Rs 406 on the BSE in intra-day trade after the company reported 9% declined in Ebitda (earnings before interest, taxes, depreciation and amortization) at Rs 212 crore in September quarter (Q2FY18). The company, integrated textile and branded apparel player had Ebitda of Rs 232 crore in the corresponding quarter for the last year.

“The fall in Ebitda during the quarter was primarily due to revenue challenges in domestic market and higher cotton prices on year on year basis,” Arvind said in a statement.

The company’s net profit declined by 14% to Rs 62 crore in Q2FY18 against Rs 71 crore in a year ago quarter. The consolidated revenue grew 13% at Rs 2,628 crore over the previous year quarter despite a challenging market due to Goods and Service Tax (GST) implementation, it added.

Going forward, the company expects transitionary impact of GST to settle down and expect revenue growth to return to normalcy.

Meanwhile, the company said that its board approved the demerger of the branded apparel undertaking from Arvind to Arvind Fashions and the engineering undertaking from Arvind to Anveshan on a going concern basis, subject to necessary regulatory approval. 

The name of the Anveshan shall stand changed to The Anup Engineering on the scheme becoming effective, it added.

Shareholders of Arvind will be entitled for 1 equity share of Arvind Fashions for every 5 shares held by them. While, the shareholder will get 1 equity share of Anup Engineering for 27 shares held by them.

At 03:20 PM; the stock was trading 9% lower at Rs 414 on the BSE, as compared to 0.42% decline in the S&P BSE Sensex. The trading volumes on the counter jumped more than five-fold with a combined 15.69 million shares changed hands on the BSE and NSE so far.