After a year of turmoil that saw Arvind Limited incurring a net loss of Rs 48 crore for the financial year 2008-09, the Ahmedabad-based denim major posted a net profit of Rs 52 crore for the fiscal 2009-10. One of the largest integrated textile apparel and branded apparel players in the country, Arvind Limited attributed the improvement in results to better operations, higher volumes due to robust demand across all product segments, lower energy costs and favourable exchange rate.
With its brands and retail businesses being demerged from the flagship company, Arvind Limited registered a revenue of Rs 2,317 crore for the financial year ended March 31, 2010, an improvement of 23 per cent against Rs 1,878 in the last financial year. The company's EBIDTA has also gone up by 25 per cent at Rs 309 crore as against Rs 248 crore in the last financial year.
Commenting on the results as well as outlook of the company, Jayesh Shah, chief financial officer and director said, "During the year 2009-10, the company seized the opportunity of resurgence in the demand for all the product segments and markets which led to sharp volume growth leading to total turnaround. On backdrop of resurgence in demand from the US and European markets, growing domestic market, favourable exchange rate, lower energy cost and expansion in capacities in both denim fabric and cotton woven fabric through outsourcing route, the outlook for the next year remains positive. At the same time, we will have to be nimble enough to manage the risk arising out of volatile exchange rate and cotton prices."
Excluding the figures of now demerged brands and retail businesses, the revenue for the fourth quarter ended March 31, 2010 is up by 21 per cent at Rs 576 core as against Rs 476 crore in the corresponding quarter of the previous year. At the operating level, EBIDTA increased by seven per cent at Rs 66 crore as against Rs 62 crore for the corresponding quarter of the previous year. Arvind Limited earned a profit of Rs 15 crore as against loss of Rs 17 crore incurred in the corresponding quarter of the previous year.
During the quarter under review, denim fabric registered growth of 40 per cent in volumes over the corresponding quarter of previous year, following a 72 per cent growth in export volume and 16 per cent growth in domestic volume.
The volume growth is attributed to very robust demand position across all the market segments. As far as shirting fabric is concerned, the growth in exports demand led to 20 per cent growth in volume.