Indian apparel retailer Arvind's Q2 pre-tax profit jumps on strong demand; shares rise

Shoppers Stop

28/10/2024 08:17

Oct 28 (Reuters) - Indian clothing retailer Arvind
 ARVN.NS  posted a 19% rise in second-quarter pre-tax profit on
Monday, aided by strong textiles demand as customers splurged on
clothes ahead of the festive season, sending its shares 5%
higher.
    The company, which sells international brands such as Tommy
Hilfiger, Arrow and Calvin Klein, said its consolidated profit
before tax rose to 1.35 billion rupees ($16.1 million), from
1.14 billion rupees a year earlier.
    Demand for textiles remained strong during the festive
season, as wealthy domestic consumers spent more, analysts
noted.
    The company said volume growth in its mainstay textile
segment was mainly due to new customer acquisition and better
demand.
    Arvind posted a near 14% rise in revenue from operations,
while revenue from its core textile segment, which accounts for
nearly 74% of total sales, grew 12%.
    The advanced materials segment (AMD), through which Arvind
makes fabrics and protective gear for construction work, grew
9%.
    Textile division has a buoyant order book, and is expected
to do well in the second half of the financial year, Arvind said
in its investor presentation, adding that AMD is expected to do
well and touch a volume growth of 20%.
    Its total expenses rose 13% to 20.66 billion rupees, which
led earnings before interest, tax, depreciation and amortization
(EBITDA) margin to contract to 10.1% from 10.7% a year ago.
    The company reported an increase in deferred tax provision
worth 293.5 million rupees during the quarter.
    Last week, rival Shoppers Stop  SHOP.NS  reported a loss for
a second straight quarter, as high inflation led customers to
cut back on discretionary spending.
 

($1 = 84.0725 Indian rupees)

 (Reporting by Ashna Teresa Britto in Bengaluru; Editing by
Rashmi Aich)
 ((AshnaTeresa.Britto@thomsonreuters.com;))