Company Details

Arvind Limited (formerly Arvind Mills) is a textile manufacturer and the flagship company of the Lalbhai

Group. Its headquarters is in Naroda, Ahmedabad, Gujarat . It has units at Santej (near Kalol). It

manufactures cotton shirting, denim, knits and bottom weights (Khakis) fabrics. It has also recently ventured

into technical textiles when it started Advanced Materials Division in 2011. It is India's largest denim

manufacturer apart from being world’s fourth-largest producer and exporter of denim.

The Company operates in three segments: Textiles segment, which includes products, such as, fabric, yarn

and garments; Brands and Retail segment, includes branded garments and apparels, and Others segment

includes electronic private automatic branch exchange (EPABX) Systems (Electronics), construction and

project activity.

The Company operates in divisions, such as denim, woven fabrics, knits fabrics, garment exports, advanced

materials, Arvind Brands, Mega Mart retail, The Arvind Store, engineering, telecom, and real estate. The

Company’s weaving capabilities include Airjet looms and Rapier looms. Its finishing capabilities include

continuous bleaching and dying ranges, caustic mercerization, and machinery for various chemical and

mechanical finishes.

Arvind owns brands such as Flying Machine, Newport, Ruf & Tuf, Excalibur and have license for

international brands such as Arrow, Lee, Wrangler Gant U.S.A., EdHardy, Izod, Cherokee, Mossimo, U.S.

Polo Assn., Billabong and Nautica.

The current market capitalization stands at Rs 7,520.04 crore. The company has reported a consolidated

sales of Rs 1,958.70 crore and a Net Profit of Rs 92.27 crore for the quarter ended Sep 2014.

Category No. of Shares Percentage

Promoters 112,222,931 43.46

Foreign Institutions 54,447,863 21.08

General Public 35,786,164 13.86

NBFC and Mutual Funds 21,544,079 8.34

Financial Institutions 16,681,743 6.46

Other Companies 13,544,046 5.24

Foreign - OCB 2,354,505 0.91

Foreign - NRI 1,335,271 0.52

Others 325,967 0.13

Central Government 500 0.00

Market Cap (Rs Cr) – 7503.25

Company P/E – 18.79

Industry P/E – 19.81

Book Value (Rs) – 102.08 %

Dividend (%) – 23.50%

EPS (TTM) – 15.46

Dividend Yield (%) – 0.81%

Face Value (Rs) - 10

Share Holding Pattern Financial Details

Industry Details

India is the one of the world's largest producers of textiles and garments. Abundant availability of raw

materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing

hub. It is the world's second largest producer of textiles and garments. The Indian textiles industry accounts

for about 24 per cent of the world's spindle capacity and eight per cent of global rotor capacity. The potential

size of the Indian textiles and apparel industry is expected to reach US$ 223 billion by 2021, according to a

report by Technopak Advisors.

The textiles industry has made a major contribution to the national economy in terms of direct and indirect

employment generation and net foreign exchange earnings. The sector contributes about 14 per cent to

industrial production, four per cent to the gross domestic product (GDP), and 27 per cent to the country's

foreign exchange inflows. It provides direct employment to over 45 million people. The textiles sector is the

second largest provider of employment after agriculture. Thus, the growth and all round development of this

industry has a direct bearing on the improvement of India's economy.

Major export destinations for India’s textile and apparel products are the US and EU, which together

accounted for over 75% of demand. Exports to the US have further increased since 2005, post the

termination of the MFA. Analysis of trade figures by the US Census Bureau shows that post-MFA, imports

from India into the US have been nearly 27% higher than in the corresponding period in 2004-05.

Rupee depreciation has improved the competitiveness of Indian exporters in global textile trade mainly over

China, Bangladesh and Vietnam. Sri Lanka is emerging as a competitor with an edge in currency

competitiveness. Rupee depreciated the most during June to September 2013 against the currencies of

these countries, although it has stabilised post October 2013. Rupee also remained the most volatile of

currencies among Asian peers in 2013. Also, currency gains were partly offset by hedging costs and

positions and bargain hunting by overseas buyers. India’s competitiveness also continues to benefit from

rising labour costs in China.

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 258.17 258.04 254.63 254.40 231.98

Equity Share Capital 258.17 258.04 254.63 254.40 231.98

Reserves 2,377.98 2,041.47 1,757.96 1,236.00 1,107.31

Networth 2,636.15 2,299.51 2,016.00 1,490.40 1,346.86

Secured Loans 2,157.69 1,908.07 1,560.73 1,763.23 1,728.73

Unsecured Loans 91.49 54.57 42.57 48.89 141.85

Total Debt 2,249.18 1,962.64 1,603.30 1,812.12 1,870.58

Total Liabilities 4,885.33 4,262.15 3,619.30 3,302.52 3,217.44

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Application Of Funds

Gross Block 4,061.55 3,806.43 3,539.07 3,172.22 3,002.45

Less: Accum. Depreciation 1,565.35 1,466.77 1,270.01 1,170.26 1,084.34

Net Block 2,496.20 2,339.66 2,269.06 1,696.10 1,844.97

Capital Work in Progress 72.32 200.32 179.10 142.28 46.86

Investments 700.33 492.86 337.11 309.40 300.29

Inventories 942.61 877.96 728.42 699.16 432.00

Sundry Debtors 518.93 442.42 405.55 563.63 424.16

Cash and Bank Balance 123.82 150.60 39.37 14.20 33.35

Total Current Assets 1,585.36 1,470.98 1,173.34 1,276.99 889.51

Loans and Advances 1,179.30 779.90 662.17 514.19 579.64

Total CA, Loans & Advances 2,764.66 2,250.88 1,835.51 1,806.07 1,478.94

Current Liabilities 1,053.58 922.63 857.40 640.51 446.24

Provisions 94.60 98.94 144.08 10.82 7.38

Total CL & Provisions 1,148.18 1,021.57 1,001.48 651.33 453.62

Net Current Assets 1,616.48 1,229.31 834.03 1,154.74 1,025.32

Total Assets 4,885.33 4,262.15 3,619.30 3,302.52 3,217.44

Contingent

Liabilities924.40 674.27 661.11 682.29 301.99

Book Value (Rs) 102.11 89.11 79.04 58.59 57.73

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 4,775.48 3,795.14 3,494.12 2,665.81 2,318.49

Excise Duty 0.00 14.83 0.00 2.23 1.74

Net Sales 4,775.48 3,780.31 3,494.12 2,663.58 2,316.75

Other Income 68.04 93.46 387.61 80.71 69.50

Stock Adjustments 66.30 165.99 -3.57 93.63 -18.78

Total Income 4,909.82 4,039.76 3,878.16 2,837.92 2,367.47

Expenditure

Raw Materials 2,547.38 2,032.98 1,857.17 1,519.77 1,218.87

Power & Fuel Cost 407.30 406.13 349.24 243.69 208.62

Employee Cost 508.84 442.22 360.51 273.90 240.90

Other Manufacturing Expenses 14.57 117.11 13.60 166.42 136.02

Selling and Admin Expenses 0.00 0.00 0.00 86.15 98.39

Miscellaneous Expenses 569.19 361.17 408.79 82.95 85.73

Total Expenses 4,047.28 3,359.61 2,989.31 2,372.88 1,988.53

Operating Profit 794.50 586.69 501.24 384.33 309.44

PBDIT 862.54 680.15 888.85 465.04 378.94

Interest 296.44 268.44 270.25 215.44 213.32

PBDT 566.10 411.71 618.60 249.60 165.62

Depreciation 157.51 150.49 130.51 116.16 113.80

Profit Before Tax 408.59 261.22 488.09 133.44 51.82

PBT (Post Extra-ord Items) 408.59 261.22 488.09 135.13 52.00

Tax 47.20 0.00 53.86 0.00 0.00

Reported Net Profit 361.39 261.22 434.23 134.80 52.00

Total Value Addition 1,499.90 1,326.63 1,132.14 853.11 769.66

Equity Dividend 60.67 42.58 25.80 0.00 0.00

Corporate Dividend Tax 10.31 7.24 4.19 0.00 0.13

Per share data (annualised)

Shares in issue (lakhs) 2,581.76 2,580.43 2,546.33 2,543.99 2,319.78

Earning Per Share (Rs) 14.00 10.12 17.05 5.30 2.21

Equity Dividend (%) 23.50 16.50 10.00 0.00 0.00

Dividend History

Index and Price Comparison

Company Forecast

PBIT – 13.1 v/s 11.26

RoCE – 14.76 v/s 12.42

RoE –

Net Profit Margin – 7.43 v/s 6.73

Return on net worth – 13.7 v/s 11.35

D/ E Ratio – 0.85 v/s 0.85

Interest Cover – 2.43 v/s 1.97

Current Ratio – 0.85 v/s 0.75

Reserves – 2377.98 cr v/s 2041.47 cr

PAT – 361.39 cr v/s 261.22 cr

Total assets – 4885.33 cr v/s 4262.15 cr

Net sales – 4775.48 cr v/s 3795.14 cr

Book Value – 102.11 v/s 89.11

Days BSE NSE

30 272.82 272.79

50 275.41 275.45

150 269.62 269.66

200 250.11 250.16

Important Ratios Simple Moving Average

Symbol Value Action

RSI(14) 82.105 Overbought

STOCH(9,6) 73.090 Buy

STOCHRSI(14) 60.404 Buy

MACD(12,26) 52.200 Buy

ADX(14) 71.773 Overbought

Williams %R -22.809 Buy

CCI(14) 86.8763 Buy

ATR(14) 41.1536 High Volatility

Highs/Lows(14) 50.0500 Buy

Ultimate Oscillator 64.876 Buy

ROC 127.682 Buy

Bull/Bear Power(13) 82.2740 Buy

Technical Indicators

Recommendations

Buy Arvind Ltd. at current or lower market levels

Reasons for the recommendations are :

Sound financial position of the company.

Availability of adequate manufacturing facility to meet demands.

Increasing middle class population and brand consciousness will increase sales.

Clients include major national and international players.

Growth forecast of the textile industry.

Favorable export scenario.

Availability of low cost raw materials.

Decreasing payback period.