In terms of sheer presence of brands in the garment business, Arvind Mills is in a class of its own. The company has a huge portfolio of brands that very few can compete with. It includes brands like Newport, Arrow, Ruf & Tuf and Excalibur.

The most important fact, however, is that with brands like Newport, Flying Machine, Lee and Ruggers, Arvind Mills caters to a wide range of customers with a wide variety of preferences in terms of quality and price. Take the example of Arrow. This brand caters to the high-end office dresser, while Newport and Ruf & Tuf denims cater to the lower end users.

Another aspect of creating and positioning brands has been the management's swift response to changes in the fashion world. The international market of denims has slowly changed. The demand for the regular variety of denims has given way to gabardines. Arvind Mills had invested heavily in creating capacities for manufacturing regular denims.

But this did not prevent the management from catering to the new demand for gabardines. Today Arvind Mills manufactures economically priced gabardines sold under the Ruggers brand.

But in spite of huge investments and big plans, the company is not an investor's delight. Its share price has been languishing at around Rs.22 a share. The company has a very high debt:equity ratio of 1.66:1. In fact the debt burden has been eating into the overall profitability of the company.

For the year ended March 1999, Arvind Mills had recorded revenues worth Rs. 940 crore and earned a net profit of Rs. 14 crore. The company's interest costs at the time were Rs.31 crore.

The first quarter of the fiscal year 1999-2000 saw revenues grow by 23 per cent, as compared to the first quarter in the previous fiscal year, to touch Rs.250 crore. But the company suffered losses to the tune of Rs.48 crore. This, the management holds, is because the company absorbed depreciation and interest costs of the shirtings facility that commenced operations during this period and was operating at a lower capacity utilisation rate.

The management expects this burden to be lightened soon when the plant sets off on full steam.

This plant is expected to provide an evenly balanced portfolio to Arvind Mills. The share of denim in the company's total sales, is expected to come down soon.

Investors can look forward to steadier times as the financial burden on the company is expected to ease considerably.