Arvind’s denim and woven volumes grew by 13% and 12%, respectively; garments volume recovered to 93% in Q4FY2021. OPM expanded by 297 bps to 12.6% with textile EBIDTA margin at 12.6% and advance material EBIDTA margin at 13.8%. Demand environment in export markets remain strong (especially in the US); domestic market to regain momentum from Q2/Q3 prior to start of the festive season. In a stable business environment, management targets revenue of Rs. 8,000 crore in FY2023. Debt on books has reduced by Rs. 421 crore in FY2021. The company is expected to further reduce it through working capital efficiencies and sale of non-core assets (will fetch Rs. 350 crore in three years).
OutlookThe stock is currently trading at attractive valuation of 4.7x its FY2023E EV/EBIDTA. We maintain Buy on Arvind with an unchanged PT of Rs. 95.
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