Motilal Oswal has issued a buy rating on Arvind Fashions with a target price of ₹650 in its research report dated April 02, 2026. According to the brokerage's analysis, the stock has declined approximately 20% over the past six months, making current valuations attractive at 35x FY27E earnings compared to the peer group average of 37x for ABLBL. The recommendation is based on the company's strong operational performance and improving fundamentals despite broader market challenges.
As reported by Motilal Oswal, Arvind Fashions demonstrated robust operational momentum with 9MFY26 performance highlighting 8% same-store sales growth (SSSG). The company's growth strategy is being driven by direct channels, with retail increasing 14% year-on-year and online sales rising 19% year-on-year. This diversified channel approach, combined with reduced discounting and stable inventory turns of approximately 4x, has contributed to gross margin expansion of 115 basis points year-on-year and improved cash conversion metrics.
According to the brokerage report, Arvind Fashions is benefiting from a strengthening direct channel strategy and scaling adjacencies that now account for over 20% of revenue. Core brands remain resilient while adjacencies provide additional growth levers. The company's focus on execution across retail, online, and brand portfolios has helped maintain strength despite soft broader demand conditions. Motilal Oswal projects a revenue/EBITDA CAGR of 12%/19% over FY26-28E in its financial modeling.
As reported by Motilal Oswal, the brokerage believes the current correction presents a compelling entry opportunity into a high-quality franchise featuring a strengthening direct channel, visible adjacency growth runway, and improving earnings quality. The company's diversified revenue streams and operational improvements position it well for sustained growth, with the SoTP-based target price of ₹650 representing significant upside potential from current levels.
