Arvind (500101) Q2 24/25 earnings summary

Executive summary

• All business segments reported positive trends in volume, realization, revenue, and EBITDA, marking a return to growth after a slow Q1 and the best quarterly revenue in nine quarters.

• Q2 FY25 saw 14% year-over-year revenue growth, driven by strong volume increases across Textiles and Advanced Materials segments.

• Garments achieved a third consecutive quarter of over 9 million units, with denim volumes at a nine-quarter high.

• The company navigated a challenging macro environment with supply chain disruptions and economic uncertainty, but saw demand revival, especially domestically.

• Sustainability initiatives and differentiated products continue to attract marquee customers and strengthen market position.

Financial highlights

• Q2 FY25 consolidated revenue grew 14% year-over-year to ₹2,188.31 crore, the highest in nine quarters.

• EBITDA (excluding other income) was ₹221 crore; adjusted EBITDA margin was 10.6% YoY.

• Profit before tax rose 20% YoY to ₹135 crore; adjusted profit after tax was ₹97 crore, excluding a one-time deferred tax impact.

• Consolidated net profit for Q2 FY25 was ₹62.77 crore, up from ₹51.22 crore year-over-year.

• ROCE improved by 150 bps to 13.9% for the period.

Outlook and guidance

• Both Textiles and Advanced Materials Division (AMD) expect strong demand in H2, with textiles likely to see all-time high demand rates.

• AMD is confident of achieving 18-20% growth for the nine-month period, with good visibility for Q3 and Q4.

• Capex projects exceeding ₹400 crore are progressing as planned.

• The company is undergoing a Scheme of Arrangement to transfer the Advanced Materials division to a wholly owned subsidiary, pending regulatory approvals.

• Operations at the Santej plant have normalized after a strike in Q1 FY25.