Textile major Arvind is targeting revenues of `20,000 crore by 2023, Arvind chairman and managing director Sanjay Lalbhai told a television channel on Wednesday.
Arvind’s businesses include textiles, garments, brands, real estate and engineering. The company posted revenues of `9,314 crore in FY17, up 15.1% over those in FY16. The operating profit (Ebitda) declined 1.1% to Rs 1,021 crore while the net profit grew just 1.2% to `320 crore. For the nine months to December, 2017, the company reported revenues of Rs 7,863.32 crore, up 15% year-on-year. The Ebitda fell 15.6% y-o-y to `268.39 crore while the net profit came off 10.2% year-on-year to Rs 200.34 crore.
Post the split of its branded apparel and engineering businesses, expected by September this year, Arvind Fashions will be a separate entity.
“In the brand and retail segment, each of our brands is growing at 20% and we see this business growing to `9,000 crore in the next five years from Rs 4,000 crore at present. Demerger will help raise resources independently and we will have four listed companies by 2019,” Lalbhai said.
Over 35% of the company’s revenues come from the sales of brands like Calvin Klein, Flying Machine, Arrow, Tommy Hilfiger, Aeropostale and Gap, among others. Revenues for the branded apparel segment came in at `961 crore in Q3FY18, up 23.6% year-on-year, while Ebitda improved almost 123% to Rs 67 crore.
The company is also focusing on growing its textile business by 10% to 15% year-on-year in the next three years.
The textiles business of Arvind, with a base of Rs 6,000 crore, is growing at around 6% at present, said Lalbhai. Revenue at Arvind’s textile business grew 9.41% to `1,534.43 crore in Q3FY18. According to analysts at CLSA, Arvind’s management has earmarked `1,500 crore of capital to be invested over the next three years in processing and technology-driven innovations, creating capabilities in advanced materials and developing capacity in the high-growth garmenting division.
The proposed demerger of the brands and retail business from the parent should help to create value with the businesses maturing and operating leverage would kick-in with scale over time. In textiles, the shift in favour of high asset turns and technology-driven expansion should drive value, the report said.
Arvind had 1,137 stores across brands, 93 Unlimited stores and 32 specialty retail stores as of December 31.