Arvind expects operating margins to improve in Q2

In an interview with CNBC-TV18, Sanjay Lalbhai, CMD, Arvind said the company lose Rs 100 crore on sales and Rs 35 crore of profit due to the Naroda plant shutdown. The sale of branded garments were weak in may but, performance in July seems to be encouraging so far, he added.

Lalbhai is also hopeful of improvements in the fabric segment margins despite demand growth concerns persisting due to a weak monsoon. According to him, the weakness in branded business is going to be offset by fabrics and the company is expecting its operating margins to improve in Q2.

Going forward, Arvind is planning to launch three new real estate projects in August-September.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Can you first start by quantifying what the impact of the Naroda plant shutdown would have been for the quarter?

A: I think something like Rs 100 crore of top-line and we have lost around Rs 35 crore of bottom-line. That's the kind of impact we have faced.

Q: Is the impact completely behind you? You don't see a chance of any kind of recurrence?

A: No, I think it is behind us and things are very peaceful. Production and everything is working satisfactorily.

Q: Has the market for branded garments turned sluggish in terms of off take?

A: You asked about garments or fabrics?

Q: Branded garments.

A: The first quarter is always slow and May was pretty bad, but we are expecting the second quarter to be normal.