Arvind Fashions (ARVINDFASN) Q1 24/25 earnings summary

Executive summary

• Achieved double-digit revenue growth in Q1 FY25, with consolidated revenue at ₹954.84 crore and EBITDA at ₹123 crore, up nearly 20% year-over-year.

• EBITDA margin improved by 100 basis points to 12.9%, driven by better price realization, cost efficiency, and higher gross margins.

• Net profit for the quarter was ₹13.92 crore, reversing a loss in Q1 FY24, while PAT turned positive at ₹1 crore.

• Growth was driven by market share gains, premiumization, and strong performance in adjacent categories, especially womenswear.

• Growth observed across all brands and channels despite subdued market conditions due to elections, heatwave, and fewer wedding dates.

Financial highlights

• Gross profit margin rose to 55.2%, an 80 basis point increase year-over-year, attributed to controlled discounting and sourcing efficiency.

• Online direct-to-consumer business grew over 60% year-over-year, with improved channel profitability.

• Working capital days remained stable, inventory days reduced by 3 to 91, and stock turns improved to 4.

• Net debt stood at INR 225 crore at quarter-end, with plans to maintain or reduce through free cash flow.

• EBITDA increased to ₹123 crore from ₹103 crore, with margin improving to 12.9% from 11.9%.

Outlook and guidance

• Guidance maintained for double-digit revenue growth and 100 basis points EBITDA margin expansion for FY25.

• Medium-term revenue growth targeted at 12%-15%, with continued focus on profitable growth.

• Retail space expansion of 15% planned, with emphasis on flagship and innovative store formats.

• Expect growth acceleration with an early festival calendar compared to FY24.

• Continued emphasis on profitability improvement via operating leverage and cost optimization.