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Company Overview

Arvind Limited formerly known as Arvind Mills is a textile manufacturer and


the flagship company of the Arvind Group. Its headquarters is in Naroda, Ahmedabad. Arvind
limited started in 1931 with the aim of manufacturing high-end Superfine Fabrics. In addition to
Spinning and weaving facilities it also had dyeing, bleaching, finishing and mercerizing facilities.
Now it manufactures cotton shirting, denim, knits and bottomweights (Khakis) fabrics. In 2001 it
started Advanced Materials Division which marked its entry into technical textiles business. It is
India's largest denim manufacturer apart from being worlds fourth-largest producer and exporter
of denim.
Sanjaybhai Lalbhai is the Chairman & Managing Director of Arvind. In the early 1980s, Sanjay
Lalbhai led the 'Reno-vision' whereby the company brought denim into the domestic market, thus
starting the jeans revolution in India. Today it retails its own brands like Flying Machine, Newport
and Excalibur and licensed international brands like Arrow, Lee, Wrangler and Tommy Hilfiger. It
also runs a value retail chain called MegaMart which stocks company brands.

Evolution over the years

1931 :Arvind Mills Ltd is incorporated with main focus on manufacturing products like
dhoties, sarees, mulls, dorias, crepes, shirtings etc
1985-86 :Reno-vision modernization programme was undertaken along with
implementation of a new Denim plant.
1987-88:Arvind entered the denim export market.
1991 - Arvind reached 100 million meters of denim per year, becoming the fourth largest
producer of denim in the world.
1995 : Brand Ruf & Tuf was launched.
1997 : `Newport` brands marketing and distribution network of was strengthened and
Flying Machine and Ruggers brand were also strengthened. Arvind Fashions doubled its
capacity in the manufacturing facility in Bangalore to produce Lee jeans.
1998 : Arvind Mills emerges as the world's third largest manufacturer of denim

2003 : Arvind Mills witnesses 280% growth in the net profit for the fourth quarter. Arvind
Mills Ltd is assigned a `P1+` rating by CRISIL, which indicates a very strong rating for their
commercial paper.

2005 : Arvind Mills posts a profit growth in excess of 80 per cent for the fourth quarter in a
row. Arvind Mills buys entire stake in Arvind Brands from ICICI Ventures.

2007 : Arvind establishes MegaMart, One of India's largest value retail chains.

2010 : The Arvind Store is launched bringing the company's best products at one place.

2012 : Signs distribution agreement with Billabong. Arvind acquires India operations of
Debenhams, Next and Nautica.

2014 :Bought 49 % stake in Calvin Klein Businesses in India. Launches JV with Goodhill
Corporation Limited of Japan. Also gets into Joint venture with OG Corp, Japan, for
manufacture and sale of non-woven fabrics.

2014 : Forayed into the E-commerce segment with custom clothing brand 'Creyate

Management

Name

Designation

Mr. Sanjay S. Lalbhai

Chairman & Managing Director

Mr. Jayesh Shah

Director & Chief Financial Officer

Mr. Punit Lalbhai

Executive Director & Sustainability Champion

Mr. Kulin Lalbhai

Executive Director

Dr. Bakul H. Dholakia

Non-Executive & Independent Director

Ms. Renuka Ramnath

Non-Executive & Independent Director

Mr. Dileep Choksi

Independent Director

Mr. Vallabh Bhanshali

Independent Director

Mr. Samir Mehta

Independent Director

Mr. Nilesh Shah

Independent Director

Shareholding Pattern

% Shareholding as on Sep 15
Promoter and Promoter Group

Mutual Funds and Financial Institutions / Banks


26%

Insurance Companies

44%
Foreign Institutional Investors

Non-Institutions
15%
6%

10%

Key Financials
30% of total revenues of Arvind in FY15 came from the Brand and Retail segment, of which
brands contributed around 70% while the remaining 30% came from retail. Arvinds brand
portfolio comprises of 31 brands, of which 11 are company owned, 12 are licensed, two are joint
ventures and six are exclusive retail brands. Of these 31 brands, its top four brands (power
brands) like Arrow, Tommy Hilfiger, US Polo and Flying Machine contribute around 80% of overall
brand revenue.

Sales Turnover
Operating Profit
Profit Before Tax
Reported Net Profit

FY15 (in INR Crore)

FY14(in INR Crore)

Growth

5224.69

4775.48

9.40%

838.41

822.02

1.99%

477.62

408.59

16.89%

377.43

361.39

4.44%

18
16

14.38

14.34

14

Profit Margin
(%) 15.51

16.63

15.83

12.42

12
10
Operating Profit Margin(%)

8
6

Series 3
7.56

6.91

7.22

5.02

4
2
0
Mar '11

Mar '12

Mar '13

Mar '14

Mar '15

The Operating Profit Margin (%) has decreased from 16.63% to 15.83% compared to previous
year and so has the Net Profit Margin (%) from 7.56% to 7.22%.

Profitability (%)

30
25.13

25
20
15
10

15.315.64

15.19
12.9213.29

16.33
14.64

Series 3

10.42
9.04

5
0
Mar '11

Mar '12

Mar '13

RONW

Mar '14

Mar '15

The Return on Net Worth has decreased marginally compared to previous year and Capital
Employed has increased slightly when compared to the previous year. Both these parameters
over the past few years barring FY 12(for RONW) have been in more or less the same range.
These ratios have been improving mainly due to an increase in revenues of asset light business
like brand & retail.

Chart Title
18
16
14
12
10
8
6
4
2
0

Chart Title

17.05
14

14.62

10.12
Series 3
5.3

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

0.83

0.85

0.75

0.67

0.76

Series 3

The Earning per share has increased marginally compared to the previous year. Its current ratio
is quite below that of its sector which is at 1.76. The Company needs to improve this ratio as it
indicates liquidity issues and it might face difficulty in paying its creditors in the short term.
Overall the company is showing healthy financial growth but is still short of achieving its own
previous highs of FY 12.

SWOT Analysis

Strengths:
Strong Portfolio of domestic and
international brands
Efficient work force
Increased use of technology thereby
increasing the productivity

Weaknesses:
Global penetration is limited as
compared to other brands
Reach of Arvind MegaMart stores is
limited to big cities
Lack of efforts to build brand equity

Opportunities:
Increase the reach by increasing
mega mart stores in small cities and
rural area
Global expansion to increase sales
46% of the Population is between
the age group 15-44

Threats:
Increase in the competition from
Indian as well as international
brands
Pirated or fake products imported
from China, Bangladesh etc. at very
cheap rate
Due
to
both
domestic
and

international brands higher brand


switching is seen

Competitor Analysis
Sales Turnover

Net Profit

Total Assets

Name

Market
Capitalization

Arvind Limited

6747.89

5224.69

377.43

5033.49

2645.32

100.00

2123.88

2378.27

24.56

1186.37

1510.30

78.79

715.25

Raymond
2378.81
Limited
Bombay
1271.22
Dyeing
Siyaram
Silk 933.89
Mills
(All values are in INR Crore)

By looking at competitor analysis we can say that Arvind Limited has managed to earn highest
net profit during the year 2014-2015. Three companies except Siyaram Silk Mills were founded in
early 90s (1879 for Bombay Dyeing), out of these Arvind Limited has been a consistent
performer. Total assets of Arvind Limited are also highest this shows that, company has
undertaken a business strategy which changed over the years and helped company to grow at a
higher rate.
Competitor Profiles
1. Raymond Limited
Raymond Limited comprises of three divisions namely Textiles, Engineering and
Aviation.
Considering the textile sector, Raymond Limited is largest non-segregated
manufacturer of worsted fabric, in the world.
2. Bombay Dyeing
Bombay Dyeing is the front runner company of Wadia Group. This company is
mainly into the business of textiles.
Bombay Dyeing not only manufactures clothes for people but also helps customers
in furnishing their homes.
3. Siyaram Silk Mills
Siyaram Silk Mills is the subsidiary of Siyaram Poddar group. Siyaram Silk Mills is
also known as Siyarams or SSM.
Today, Siyarams is the largest manufacturer of blended fabrics in India.

Siyarams has entered the Readymade Garment sector in beginning of the year
2014.

New Developments
Arvind has recently forayed into the Rs 30,000Cr footwear market and is about to
launch its own footwear brand. It will be offering a mix of its own, acquired, licensed
and Joint venture brands.
Arvind Lifestyle Brands in partnership with GAP will open its first GAP store in Delhi in
May.
Arvind has now also entered into the beauty and cosmetics market in partnership with
Sephora.
Arvind has plans to scale up brands like Nautica, Hanes, Calvin Klein, Gant, Childrens
Place and GAP to power brands over the next three to four years.
It has also entered the E-Commerce business with its brand called Creyate where it will
provide its customers with bespoke apparels which will be delivered to their doorstep in 10
to 12 days. Along with custom made apparels the site will also showcase all of its different
brands online.
Arvinds lifestyle brands subsidiary will have to pay up $3.2 million to Ralph Lauren to
settle a lawsuit the US-based luxury fashion house filed in 2013.The Club Monaco and Polo
Ralph Lauren maker had filed a case in a US District Court against Arvind Lifestyle and US
Polo Association (USPA), alleging a breach of agreement regarding disclaimers to be
printed on USPA products sold in India.

Conclusion:
Arvind Limited is one of the leading players in the textile sector in India. Looking at the number
of Arvind mega mart stores, there is a scope for expansion in India and as well as internationally.
In 2012-2013, due to stagnancy in economy, high inflation and higher interest rates consumer
sentiments were affected badly. This resulted decrease in the business of the company during
that year. After the change in Government in 2014, economy is growing, interest rates are
lowered and inflation has eased. These changes are helping company to get its business back on
track. Company has considerably increased the use of technology in the manufacturing plants
thereby helping company to increase its productivity. Various training and development programs
for employees would definitely increase the output desired by the company. Exports of the
company will increase in near future as the competition from other countries like China has
decreased due to weak currency and decreasing cost competitiveness of the country.

References
http://www.arvind.com/
http://www.arvind.com/investorrelations/annualfinancialreport.htm
http://in.reuters.com/finance/stocks/ARVN.BO/key-developments
http://profit.ndtv.com/news/interviews/article-arvind-limited-bets-big-on-e-commerce-withcreyate-650786

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