Arvind eyes Rs40 bn in revenue by FY10

Arvind eyes Rs40 bn in revenue by FY10
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First Published: Mon, May 12 2008. 04 06 PM IST
Updated: Mon, May 12 2008. 04 06 PM IST
Reuters
Mumbai: Arvind Ltd is targeting revenue of Rs40 billion in 2009/10 and plans to sell off some of its non-strategic assets over the next three years to pay off its debts, top officials said on 12 May.
The revenue growth will be led by expansion in its retail unit Megamart, they said. The company is targeting an 8-fold rise in revenue from Megamart to Rs10 billion in the next three years.
“Most of the growth in revenue will come from Megamart and brands,” Chief Financial Officer Jayesh Shah told reporters at a press conference.
Megamart’s revenue for FY08 was Rs1.4 billion. Arvind’s net sales for FY08 were about Rs22.7 billion.
Brands and retail contribute around 19% of the company’s annual revenue. “We see that becoming almost 40% in two years from now,” Shah said.
The company, which earlier in the day said it had changed its name to Arvind Ltd from Arvind Mills Ltd, plans to invest about Rs4 billion on retail expansion in the next three years.
“Arvind’s founders also plan to infuse capital of Rs1.88 billion through the exercise of warrants, by May 2009, to recapitalise the firm,” Sanjay Lalbhai, CMD, Arvind Mills said at the conference. This will raise promoters’ stake in the company to 47% from 34% now.
Asset sale
The company plans to raise about Rs7 billion to pay off some its debt through through sale of non-strategic assets, consisting mainly of 5 million square feet of land in Ahmedabad, over the next three years, Shah said.
The company’s total debt stood at Rs14 billion at the end of March 2008. Arvind has hired consulting firm Ernst & Young as advisor for the proposed sale. E&Y is expected to submit its report within two months.
Arvind shares ended 2.7% up at Rs51.30 in the Mumbai market.
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First Published: Mon, May 12 2008. 04 06 PM IST