Arvind's Business recovered to 80% in the Q3 with garmenting and denim business recovering to 81% and 89% each; textile business’ margins recovered to FY2020 levels at 12.5%. The company managed to reduce debt by Rs. 300 crore in 9MFY2021; plans to reduce it further by Rs. 100 crore in Q4 on back of better cash flows. High demand in export markets for garmenting and denim products and a sequential recovery in domestic market would help Arvind to improve performance 12% q-o-q in Q4; company aims for EBIDTA margins of 12%. The stock is currently trading at 9.2x its FY23E EPS and 4.3x its EV/EBIDTA.
OutlookWe maintain a Buy recommendation with a revised price target of Rs. 95.
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