Buy Arvind; target of Rs 330: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's reserach report on Arvind (ARVINDMIL)Arvind Ltd is the flagship company of the Lalbhai Group that has been around since 1930. Arvind started as a superfine fabric manufacturer in the early 30s. Since then, the company has been constantly reinventing itself by venturing into new categories in textiles like denim, suiting, shirting, etc. Arvind has been a pioneer in India in launching domestic denim brands like Ruff & Tuff and Flying Machine. The company has also been licensing international brands like Arrow and US Polo in India. Currently, Arvind is considered India’s leading fully integrated textile, branded apparel & retail company, which has a strong presence across the value chain. The company is a market leader in manufacturing denim in India with total capacity of 108 million metre per annum (mmpa) of which 44% is export driven. The textile division comprises sub-categories like denim, woven, voiles and knits. The company also has garmenting capabilities with an annual capacity of ~22 million pieces as on Q1FY16. Arvind has restructured its retail strategy for its Megamart stores. The company now plans to widen its offerings by increasing the size of the store rather than opening new stores. Furthermore, new stores from GAP and Children’s Place coupled with a host of probable power brands would enhance revenue visibility and aid profitability. Given the diversified business model and multiple positive triggers, we value Arvind’s standalone business at 4x EV/EBITDA and ALBL at 2x market capitalisation to sales. We recommend BUY with a target price of | 330.

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