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Buy Arvind; target of Rs 125: Sharekhan

Sharekhan is bullish on Arvind has recommended buy rating on the stock with a target price of Rs 125 in its research report dated August 01, 2022.

August 04, 2022 / 04:42 PM IST

Sharekhan's research report on Arvind


Arvind Limited (Arvind) posted strong Q1FY2023 performance. Revenue and EBITDA grew 64% and 99% y-o-y, respectively, ahead of expectations, driven by strong revenue growth in core textile/advanced material business (on low base) and better operating leverage resulting in higher margins. Slowdown in the demand environment in the US and Europe and higher inventory with global retailers will impact export demand in Q2/Q3. Domestic demand is expected to remain strong. Overall, we expect muted Q2FY2023. Cotton price correction provides some relief. Long-term debt on books has reduced by Rs. 56 crore in Q1. Overall, net debt stood higher at Rs. 1,809 crore due to higher inventory levels. Management is confident of reducing debt by the end of the fiscal.



Outlook


The stock has corrected by 17% in the last three months and currently trades at 7.8x/6.0x its FY2023E/FY2024E earnings. We maintain Buy with a revised PT of Rs. 125.

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Arvind - 020822 - khan

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first published: Aug 4, 2022 04:42 pm
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