Arvind Fashions Ltd. (AFL), India's leading casual and denim apparel company, delivered a remarkable financial turnaround in the March quarter. According to reports from CNBC TV18, the company reported a net profit of ₹47 crore during the quarter, compared to a net loss of ₹93 crore in the same quarter last year. The previous year's net loss was primarily due to a one-time deferred tax asset charge of ₹120 crore that was booked at a subsidiary level. During the current quarter, the company also recognized a one-time incremental provision of ₹23.32 crore towards the impact of new labour codes.
The company demonstrated strong operational performance with revenue increasing by 14.8% on a year-on-year basis to ₹1,364.8 crore. As reported by CNBC TV18, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 19.2% from the year-ago quarter to ₹189 crore from ₹158.6 crore earlier. EBITDA margins expanded by 60 basis points to 13.9% from 13.3% in the previous year. The company's return to profitability reflects improved operational efficiency and cost management initiatives.
The market responded positively to the strong quarterly results, with shares of Arvind Fashions gaining as much as 6% after the earnings announcement. According to CNBC TV18, the stock was currently trading 4.9% higher at ₹457.9. However, the stock remains down 10% on a year-to-date basis, indicating mixed longer-term performance despite the recent positive momentum.
The company acknowledged ongoing challenges from West Asia geopolitical tensions, which are creating inflationary pressures on petroleum-derived inputs, shipping costs, and select raw materials, as well as pressure on the rupee. As reported by CNBC TV18, to mitigate these impacts, the company is leaning on India-based sourcing, front-loading inventory ahead of anticipated price increases, and doubling down on cost controls while implementing selective price hikes to protect growth. The company has also guided for double-digit revenue growth, EBITDA and PAT margin expansion through operating leverage and a richer channel mix.
Looking ahead, Arvind Fashions has outlined its strategic priorities for continued growth. According to CNBC TV18, the company plans to continue store expansion through the franchise-owned, franchise-operated approach, with online seen as a key growth driver. The company also expects further improvement in Return on Capital Employed (RoCE) through working capital discipline and free cash flow generation. This comprehensive approach focuses on operational efficiency, market expansion, and financial optimization to sustain the positive momentum from the recent quarterly results.
