CARE Ratings has upgraded Arvind's long-term credit rating to 'CARE AA; Stable' from 'CARE AA-; Stable' while reaffirming the company's short-term rating at 'CARE A1+'. According to reports from Business Standard, the upgrade reflects sustained improvement in the company's business risk profile, driven by growing share of advanced materials and technical textile business in overall operations. The rating upgrade specifically factors in the sustained improvement in Arvind's business risk profile considering growing share of its advanced materials/technical textile business in overall business mix and profitable scale-up of its garment business. CARE Ratings has also provided detailed rating history showing the consistent improvement in Arvind's creditworthiness over recent years.
The rating upgrade is supported by Arvind's garmenting volume growth of 12% year-on-year in FY26 and 13% in Q1FY27, with expectations of sustained healthy growth in the near-to-medium term. As reported by Business Standard, the advanced materials business, characterized by specialized industrial applications and large addressable market, provides resilience despite global headwinds. The acquisition of Dalco-GFT significantly strengthens this segment by adding scale, specialized needle-punched non-woven capabilities and access to the US filtration and geotextile markets. The advanced materials business is characterized by specialised and industrial applications, growing demand, healthy profitability, and lower susceptibility of margins to cyclicality and raw material price fluctuations.
The upgrade factors in sustained improvement in Arvind's financial risk profile with growing cash accruals and controlled net-debt levels over recent years. According to Business Standard, the ratings derive strength from Arvind's established track record, vertically integrated operations, large scale with presence across the textile value chain, diversified geographical business mix, and strong relationships with global brands and retailers. However, the rating strengths are partially offset by working capital intensive operations and relatively higher reliance on supplier credit, resulting in low current ratio. The rating strengths also remain constrained considering profitability susceptible to cotton price and foreign-exchange volatility.
Arvind's stock fell 1.50% to trade at ₹531.50 on the BSE following the rating announcement. As reported by Business Standard, the company operates as a diversified conglomerate with presence in textiles, branded apparel retailing, engineering, waste-water treatment plants, and real estate businesses at the group level. The operationalization of various free trade agreements (FTAs; UK, Australia, etc.), reduction in US tariff since February 2026 and expected implementation of FTA with European Union (EU) by FY28 provide medium-term growth visibility. Arvind is also exposed to trade related uncertainties, especially for US market and government policies related to import duties on cotton and export incentives on textile products.
