Arvind Ltd’s profit falls 41.9% to Rs44.91 crore
Bengaluru: Textiles firm Arvind Ltd’s quarterly revenue rose in January-March, but profit fell on a sharp increase in cotton prices.
Arvind’s standalone revenue rose 9.71% to Rs1,567.47 crore while net profit was down 41.9% to Rs44.91 crore year-on-year, the company said in a filing with the BSE on Thursday. On a consolidated basis, profit declined marginally.
Standalone income at the company’s textiles segment, which accounts for over 90% of overall revenue, was up over 8% versus a year-ago. That segment is expected to hold its 8% growth rate in the coming financial year too, company executives said on a conference call with analysts on Thursday evening.
“In the context of demonetisation and sharp increase in cotton prices as well as appreciation of rupee, our performance is quite satisfactory. We will continue to have double digit growth in the current financial year led by robust growth in our brand and retail business,” Jayesh Shah, Arvind’s chief financial officer, said in a statement.
Domestic cotton prices rose 19% from a year ago to Rs41,300 per 356kg candy (a traditional measure of mass), following the rally in overseas prices, Reuters reported on Wednesday. But cotton planting in India is likely to rise by 15% in the 2017-18 marketing season and could kill the global cotton prices rally, Reuters added.
“We have built a set of portfolio very consciously. There are a set of brands which are power brands and a set of emerging brands and specialty retail. Today our entire performance is dominated by power brands, which continue to deliver good growth because of our efforts in terms of expanding distribution and category,” said J. Suresh, managing director and chief executive officer of Arvind Lifestyle Brands.
But there might be some disruption in the near term due to the goods and service tax (GST) although GST will prove beneficial in the medium-term, the firm’s executives said on the conference call.