Arvind (500101) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 was significantly impacted by a 21-day strike at the Santej facility, resulting in a revenue loss of INR 200 crore and EBITDA loss of INR 60 crore, with Textiles and Advanced Materials (AMD) most affected.

• Despite disruptions, unaffected business units, especially garmenting, showed resilience with 25% volume growth and new customer additions.

• The company received an A- rating for water management from the Carbon Disclosure Project, the highest in India.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, were approved and reviewed by the Board and auditors.

• Leadership changes included the appointment of a new Key Managerial Personnel and the upcoming expiry of an Independent Director’s term.

Financial highlights

• Q1 FY25 consolidated revenue: INR 1,831 crore; EBITDA: INR 150 crore; EBITDA margin: 8.2%.

• Profit after tax: INR 39 crore; PAT margin decreased to 2.1% from 3.5% year-over-year.

• Q1 results include one-time items: INR 47 crore revenue and INR 10 crore EBITDA from land/forestry sales, and INR 10 crore donation expense.

• Standalone revenue from operations was INR 1,687.86 crore; standalone net profit was INR 39.82 crore.

• Gross debt reduced by INR 55 crore, while long-term debt increased by INR 64 crore.

Outlook and guidance

• Management maintains double-digit growth guidance for FY25, with H1 expected to contribute about 40% of the annual plan due to seasonality.

• Stronger performance is expected in Q2 FY25, with global textile markets trending up and domestic demand likely to improve.

• CapEx plan of INR 450 crore for FY25 remains unchanged, with temporary delays now resolved.

• Garmenting volume growth guidance at 25% for the year; AMD expected to grow 20%+.

• Debt levels are expected to remain stable.