Arvind Fashions. Q2 FY27 Results (NSE: ARVINDFASN)
Signal: Margin pressure
The read
Q2FY27 shows a sequential operating recovery: revenue rose to ₹1,558.83 Cr, +21.93% QoQ, and EBITDA margin recovered 160bps to 12.2%, but the margin remained 190bps below last year and finance costs rose 18.34%; consolidated PAT growth to ₹67.21 Cr was supported by operations rather than the prior year's high other income, while standalone earnings remained weak.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,558.83 Cr | +9.96% | +21.93% |
| EBIT | ₹140.62 Cr | +9.00% | |
| Net profit | ₹67.21 Cr | +19.27% | |
| EPS | ₹3.63 | +29.18% | |
| EBIT margin | 12.2% |
P&L walk
Revenue increased to ₹1,558.83 Cr, +9.96% YoY and +21.93% QoQ; gross margin improved 134bps YoY to 53.85%, but EBITDA margin fell 190bps YoY to 12.2% as other operating expenses and depreciation remained elevated; PAT rose 19.27% to ₹67.21 Cr despite other income falling 46.27%.
Segments
The filing reports a single branded-apparel segment, but the ₹67.21 Cr consolidated PAT versus ₹1.41 Cr standalone PAT shows that earnings are generated overwhelmingly in subsidiaries rather than the parent company.
Key positives
- Consolidated revenue reached ₹1,558.83 Cr, +9.96% YoY and +21.93% QoQ, showing stronger sequential momentum than the year-ago comparison.
- Gross margin improved 134bps YoY to 53.85% as stock-in-trade cost declined to 46.15% of revenue from 47.25%.
- Employee benefits plus other expenses grew 6.31% YoY versus 9.96% revenue growth, supporting a 160bps sequential recovery in EBITDA margin to 12.2%.
- Consolidated PAT rose 19.27% YoY to ₹67.21 Cr despite other income declining 46.27% to ₹6.99 Cr.
Key concerns
- EBITDA margin at 12.2% remained 190bps below the year-ago 14.1%, so the sequential recovery has not yet restored the prior margin level.
- Finance costs rose 18.34% YoY to ₹49.23 Cr, faster than revenue growth and alongside a computed increase in net debt to ₹582.72 Cr.
- Standalone PAT fell 96.09% YoY to ₹1.41 Cr as other income declined from ₹54.73 Cr to ₹4.40 Cr, highlighting the group's dependence on subsidiaries.
- Consolidated PPE plus CWIP rose 26.01% while depreciation fell 30.89% YoY, requiring monitoring for capitalisation and depreciation timing.
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