Arvind Limited, India’s largest textile and branded apparel company, today announced the demerger of its branded apparel business into a new entity ‘Arvind Fashions Limited’ that will soon be listed on the stock exchanges. The company which has a rich bouquet of owned and international brands like US Polo Association, Arrow, GAP, Calvin Klein among other reputed brands also owns the value chain ‘Unlimited’ and is also the franchise partner for ‘Sephora’, world’s largest beauty retailer. Similarly, its engineering arm will also be demerged into a new entity named Anup Engineering and this too will be listed in the exchanges.
Newsbarons provides you the highlights of a media interaction, where Sanjay Lalbhai, Chairman and Managing Director of Arvind Limited stated “We are eyeing for Rs. 9,000 crores topline by 2022 from Arvind Fashions.”
NB: Brief us about your demerger announcement of branded apparel and engineering business?
Sanjay: We have decided to demerge the branded apparel and engineering business from the parent Company. The branded apparel business will be demerged into the entity Arvind Fashion Limited.
Shareholders of Arvind Ltd will be entitled for 1 equity share of Arvind Fashions Ltd for every 5 shares held by them.
The Engineering business will be demerged into an entity which will be named Anup Engineering. The business is engaged in the manufacturing of critical process equipment. Anup has been consistently growing at 25 percent and delivering a robust financial performance.
Shareholders of Arvind Ltd will be entitled for 1 equity share of Anup Engineering Ltd for 27 shares held by them. On completion of the process, both the companies will be listed on BSE and NSE.
Arvind Fashions and Anup Engineering will also pursue their independent courses now. Arvind Fashions has already demonstrated an industry-leading track-record in the branded apparel and accessory space. Anup has demonstrated an impeccable trajectory on customer delight, topline growth and profitability.
NB: What will be advantage with this demerger?
Sanjay: This demerger frees up our resources and allows us to renew our focus on our Textiles business, which is not only our foundation but is now well-placed to achieve an accelerated growth trajectory.
NB: Brief us about your textile business?
Sanjay: We are planning to invest Rs. 1500 crore to transform the textile business.The investment will be into verticals, innovation and fabric apparel.Over the last 5 years, the textile business had grown steadily and delivered solid earnings.
NB: How is your omnichannel business is doing?
Sanjay: The omnichannel business generates about 10% of the overall sales and we expect this number to reach around 18-20% in the next few years.
NB: Brief us about your branded apparel business?
Sanjay: Our branded apparel business is growing at 22-24% per annum.
NB: What is your revenue target?
Sanjay: We are eyeing for Rs. 9,000 crores topline by 2022 from Arvind Fashions. As for our textile business, we have a revenue target of Rs. 10,000 crores in next 5-6 years.
NB: How was the quarter as a whole?
Sanjay: The consolidated revenue for the quarter stood at Rs. 2,628 crores, registering a growth of 13% over the corresponding quarter of the previous year despite a challenging market due to GST implementation.
Consolidated EBIDTA declined 9% to Rs. 212 crores from Rs. 232 crores in the corresponding quarter for the last year, primarily due to revenue challenges in domestic market and higher cotton prices on year on year basis.
Profit after Tax after Exceptional items, which consisted of retrenchment compensation, was Rs. 62 crores (down 14%) as compared to Rs. 71 crore in corresponding quarter in previous financial year.