Arvind (500101) Q2 25/26 earnings summary

Executive summary

• Achieved record Q2 FY26 performance in revenue, EBITDA, and PAT, with strong growth in both textile and advanced materials divisions despite significant U.S. tariff headwinds.

• Successfully completed the demerger of the AMD division into a wholly-owned subsidiary, Arvind Advanced Materials Ltd, effective 1st September 2025, with NCLT approval and results now shown as discontinued in standalone results.

• Maintained resilience and adaptability through cost optimization, efficiency measures, and strategic customer partnerships, with no customer loss despite tariff challenges.

• Continued focus on sustainability, including commissioning India's first supercritical CO2 dyeing facility, expanding circularity initiatives, and SBTi net-zero commitment.

• Board approved unaudited financial results for Q2 and H1 FY26, with auditor review confirming no material misstatements.

Financial highlights

• Consolidated revenue for Q2 FY26 was ₹2,371.14 crore, up 8.4% year-over-year; H1 FY26 revenue reached ₹4,377.46 crore.

• EBITDA reached ₹262 crore, up 13% year-over-year, marking the highest-ever quarterly operating EBITDA; PAT stood at ₹107 crore, a 70% year-over-year increase.

• EBITDA margin improved to 11.0% in Q2 FY26, up 41 bps YoY; textile EBITDA margin at 10%, AMD at 13.6%.

• Return on capital employed was 14.4% reported, 17% adjusted; Q2 FY26 ROCE improved by ~150 bps to ~17.2%.

• Net debt at ₹1,270 crore as of September 2025, with improved net cash from operating activities in H1 FY26.

Outlook and guidance

• Expect strong momentum to continue in H2, historically a better half for the business, with healthy Q3 order book.

• AMD and integrated textile/apparel divisions targeted for 18%-20% growth, with Q3 and Q4 expected to deliver at the higher end of this range.

• Tariffs to impact 20–25% of direct US business, with a ₹25–30 crore quarterly EBITDA impact; cost actions to partially offset.

• Management is closely monitoring US tariff developments and pursuing mitigation strategies, including supply chain adjustments and cost re-engineering.