At a Glance

Arvind Ltd, the denim king of India, just reported Q1 FY26 numbers, and guess what? They stitched a 10% YoY revenue growth at ₹2,006 crore and delivered ₹186 crore EBITDA (+14% YoY). PAT? ₹58 crore – because apparently jeans don’t print cash like IT companies. Stock trades at ₹336, with a P/E of 33.5, and still rocking a dividend yield of 1.13%. Capex plans of ₹450–475 crore for FY26 hint they’re sewing something big.

Introduction

Arvind isn’t just a textile company – it’s an 80-year-old denim warlord. From the humble fabric mills of Ahmedabad, it now ships jeans to brands you flaunt on Instagram. But the business isn’t all catwalks; with thin margins and global competition, it’s more like walking a tightrope in stilettos. The latest quarter shows signs of resilience, but the low ROE (7%) and sluggish long-term growth keep investors from screaming “fashionably profitable!”

Business Model (WTF Do They Even Do?)

• Products: Denim, cotton shirting, knits, khakis, technical textiles.
• Capacity: Denim – 100 MMPA; Woven – 150 MMPA.
• Clients: Global fashion giants & domestic retail chains.
• Verticals: Fabrics manufacturing, garments, and some technical textiles for industrial use.

Arvind’s strategy? Mix fabrics, expand markets, and pray fast fashion trends don’t change overnight.

Financials Overview

Q1 FY26 Snapshot:

• Revenue: ₹2,006 Cr (+10%)
• EBITDA: ₹186 Cr (margin 9.3%)
• PAT: ₹58 Cr (+44% YoY)

Annual Trend (FY25):

• Revenue: ₹7,632 Cr
• EBITDA: ₹789 Cr
• PAT: ₹240 Cr

Margins stay stuck in single digits, proving textiles is a game of volume, not vanity.

Valuation

Let’s rip the fabric and see the threads:

1. P/E Method: EPS TTM ₹9.8 × 15 = ₹147
2. EV/EBITDA: FY25 EBITDA ₹789 Cr × 7 = EV ₹5,523 Cr → Per Share ~₹210
3. DCF: Assuming modest 5% growth → ₹220

Fair Value Range: ₹200–₹230 (Current ₹336 = priced like designer jeans).

What’s Cooking – News, Triggers, Drama

• Capex Alert: ₹450–475 Cr planned for FY26 – capacity expansion or diversification.
• New Orders: ₹200 Cr fresh orders – denim demand is alive.
• Leadership Change: New internal auditor (Jigar Patel) appointed – fresh eyes on numbers.
• Risks: Global slowdown in apparel demand, raw material volatility.

Balance Sheet

Comment: Debt is moderate, reserves growing, but leverage still requires monitoring.

Cash Flow – Sab Number Game Hai

Remark: Strong operational cash, but heavy capex keeps free cash flow in tight jeans.

Ratios – Sexy or Stressy?

Comment: Margins too thin to be runway ready; valuation on the higher side.

P&L Breakdown – Show Me the Money

Peer Comparison

Comment: Highest revenue among peers, but margins and ROE lag behind.

Miscellaneous – Shareholding, Promoters

• Promoters: 39.56% (stable)
• FIIs: 17.58% (good confidence)
• DIIs: 18.1% (institutional comfort)
• Public: 24.77%

No pledges, but low promoter stake means less skin in the game.

EduInvesting Verdict™

Arvind Ltd is a textile veteran trying to stay fashionable in a cut-throat market. Denim demand gives it a backbone, but margins keep it humble. The Q1 numbers are encouraging, yet valuations are rich compared to its growth rate.

SWOT

• Strengths: Denim leadership, diversified product portfolio, strong cash flows.
• Weaknesses: Thin margins, low ROE, slow long-term growth.
• Opportunities: Technical textiles, exports, premium retail.
• Threats: Raw material volatility, global slowdown, competition from low-cost nations.

Final Word: A steady compounder, not a multibagger. Great for wardrobe, tricky for portfolio.

Written by EduInvesting Team | 29 July 2025
SEO Tags: Arvind Ltd, Q1 FY26 Results, Denim Stocks, Textile Industry