1. At a Glance
Arvind Fashions Ltd (AFL) strutted out of Q1 FY26 with a ₹25 Cr net profit—small, but at least it isn’t a wardrobe malfunction. With a market cap of ₹6,680 Cr and stock price dancing around ₹500, the company is still juggling its brand portfolio while coughing under borrowings of ₹1,157 Cr. Growth? Meh. Margins? Better than last season. Debt? Like that one ex, still hanging around.
2. Introduction – Catwalk with a Limp
Imagine a supermodel who’s trying to own the runway but trips over her own scarf—this is AFL in a nutshell. Revenue for Q1 FY26 stood at ₹1,107 Cr, down 7% QoQ, while net profit limped to ₹25 Cr (after a -₹72 Cr disaster last quarter). Brands like US Polo and Arrow still bring the crowd, but competition is fierce, and expansion costs bite harder than the latest sneaker drops.
3. Business Model (WTF Do They Even Do?)
AFL is a multi-brand fashion retailer handling a mix of owned brands (Flying Machine) and licensed global labels (US Polo, Tommy Hilfiger, Calvin Klein). They sell apparel, footwear, beauty products, and accessories through offline stores, e-commerce, and distributors. Translation: they’re the middleman between your wallet and your wardrobe crisis.
4. Financials Overview – Numbers That Don’t Lie (But Do Cry)
- Revenue (TTM): ₹4,772 Cr
- Operating Profit (TTM): ₹620 Cr
- Net Profit (TTM): ₹44 Cr (seriously?)
- OPM: 13% (finally above single digits)
- ROE: 3.5% (yawn)
- ROCE: 16.3% (sexy, but debt loves drama)
Verdict? The top line is stable, the bottom line needs therapy.
5. Valuation – What’s This Stock Worth?
Using P/E (industry avg 50x, AFL negligible due to low earnings), fair value falls in ₹400–₹520.
Using EV/EBITDA (12x on FY25 EBITDA ₹620 Cr), fair value lands in ₹480–₹550.
DCF? Let’s not. Even spreadsheets sighed. Market pricing around ₹500 looks… tolerable.
6. What-If Scenarios – Alternate Universes
- Best Case: US Polo + Tommy expansion works, debt reduces, margins stay hot → ₹650 in 12 months.
- Base Case: Margins hold, debt stays, revenue meh → ₹480–₹500.
- Worst Case: Consumers stop shopping, debt balloons → ₹350 (ouch).
7. What’s Cooking (SWOT)
Strengths: Global brands portfolio, omni-channel presence, strong retail footprint.
Weaknesses: High debt, inconsistent profitability, low promoter holding (35%).
Opportunities: Indian fashion retail boom, rising e-commerce penetration.
Threats: Competition (Trent, ABFRL), economic slowdown, FX volatility.
Drama factor: 8/10.
8. Balance Sheet – Assets vs. Fashionable Liabilities
| Particulars (₹ Cr) | FY25 |
|---|---|
| Assets | 3,809 |
| Liabilities | 3,809 |
| Borrowings | 1,157 |
| Equity | 957 |
Debt: not drowning, but definitely coughing.
9. Cash Flow – Sab Number Game Hai
| Cash Flow (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops | 317 | 434 | 530 |
| Investing | -28 | 32 | -75 |
| Financing | -198 | -491 | -456 |
Cash flows improving, but financing outflows bite hard.
10. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 6 | 6 | 3.5 |
| ROCE % | 14 | 16 | 16.3 |
| D/E | 1.3 | 1.2 | 1.2 |
| PAT Margin | 2.1 | 3.0 | 0.9 |
ROCE is hotter than a trending hashtag; ROE is sleeping.
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 4,069 | 440 | 87 |
| FY24 | 4,259 | 525 | 137 |
| FY25 | 4,620 | 602 | 33 |
Topline’s running, bottom line’s crawling.
12. Peer Comparison – Fashion Show Face-Off
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Trent | 17,134 | 1,436 | 124 |
| Vedant Fashions | 1,386 | 388 | 48 |
| ABFRL | 7,830 | -641 | NA |
| Arvind Fashions | 4,772 | 44 | NA |
AFL: the least drunk guest at a wedding full of finance bros.
13. EduInvesting Verdict™
Arvind Fashions is like that expensive jacket—you love wearing it, but the maintenance burns a hole in your pocket. Debt still looms, profits are fragile, and competition is relentless. Still, with global brands in its closet, AFL isn’t fading into fashion oblivion just yet. A decent pit stop, but don’t expect business class legroom.
Written by EduInvesting Team | 28 July 2025
Tags: Arvind Fashions, Fashion Retail, Apparel, EduInvesting Premium
