ARVINDFASNNSENovember 10, 2025

Arvind Fashions Limited

9,303words
103turns
10analyst exchanges
3executives
Management on call
Girdhar Chitlangia
CHIEF FINANCIAL
Kulin Lalbhai
VICE CHAIRMAN AND NON-
Amisha Jain
MANAGING DIRECTOR AND CHIEF
Key numbers — 40 extracted
11.3%
ghest ever sales and EBITDA this quarter. The demand environment was stable, and we achieved an 11.3% growth led by a healthy 8.3% LTL in our retail channel and around 25% plus growth in our online c
8.3%
this quarter. The demand environment was stable, and we achieved an 11.3% growth led by a healthy 8.3% LTL in our retail channel and around 25% plus growth in our online channel, leading to over 18% g
25%
table, and we achieved an 11.3% growth led by a healthy 8.3% LTL in our retail channel and around 25% plus growth in our online channel, leading to over 18% growth in EBITDA to INR200 crores, which i
18%
8.3% LTL in our retail channel and around 25% plus growth in our online channel, leading to over 18% growth in EBITDA to INR200 crores, which is an 80 bps margin expansion. During the quarter, the
INR200 crore
channel and around 25% plus growth in our online channel, leading to over 18% growth in EBITDA to INR200 crores, which is an 80 bps margin expansion. During the quarter, the government implemented the GST 2
80 bps
growth in our online channel, leading to over 18% growth in EBITDA to INR200 crores, which is an 80 bps margin expansion. During the quarter, the government implemented the GST 2.0 reform. A large part
INR1,418 crore
the investor call for the quarter ended September 30, 2025. In the quarter gone by, NSV stood at INR1,418 crores as against INR1,273 crores in the previous year same quarter. And EBITDA was INR200 crores versu
INR1,273 crore
quarter ended September 30, 2025. In the quarter gone by, NSV stood at INR1,418 crores as against INR1,273 crores in the previous year same quarter. And EBITDA was INR200 crores versus INR170 crores. In this
INR170 crore
as against INR1,273 crores in the previous year same quarter. And EBITDA was INR200 crores versus INR170 crores. In this quarter, AFL delivered yet again an impressive double-digit revenue growth of 11.3% and
18.2%
, AFL delivered yet again an impressive double-digit revenue growth of 11.3% and EBITDA growth of 18.2%. The direct channels contributed significantly to this growth. Our continued strong efforts to gr
50%
els of retail and B2C yielded good outcomes in the quarter. These together now account for nearly 50% of sales, a 5% point higher share over last year. Retail growth is very healthy at 14% with a ver
5%
d B2C yielded good outcomes in the quarter. These together now account for nearly 50% of sales, a 5% point higher share over last year. Retail growth is very healthy at 14% with a very good L2L of 8
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Guidance — 20 items
Kulin Lalbhai
opening
“We believe that the GST reforms will surely improve customer demand in the medium term.”
Amisha Jain
opening
“The wholesale channel growth was minimally impacted in the quarter due to destocking, and we believe that this is transitionary and the growth will be back in H2 in these channels.”
Amisha Jain
opening
“These reforms will leave higher disposable income in the hands of the consumers, and we expect these reforms to have a positive impact on demand.”
Amisha Jain
opening
“Now as we enter H2, we expect positive traction due to the upcoming wedding season.”
Amisha Jain
opening
“We will continue to open new stores and are on track to deliver new store addition target for the year as well.”
Amisha Jain
opening
“We also expect that the government initiatives will aid higher consumer disposable income, leading to a demand improvement across our categories.”
Amisha Jain
qa
“And while there was a minor transitionary impact because of that because of wholesale destocking, we do believe that this should streamline over a period of time over the next quarter.”
Deep Shah
qa
“And second question would be around, Amisha, I understand it will be too early to call out, but how has been the experience at Arvind Fashions, what are the key learnings which you have in the last couple of months?”
Girdhar Chitlangia
qa
“We hope that this will be normalized in the coming quarter.”
Amisha Jain
qa
“So from a growth perspective, we expect a high single-digit growth going forward.”
Risks & concerns — 5 flagged
Growth in other brands was muted due to impact of transition to the new GST regime.
— Amisha Jain
Because seeing the wholesale numbers, I think so Arrow and Flying Machine are still under pressure.
— Deep Shah
So that segment has reported 3% of decline on the 1H to 1H basis.
— Avinash
So the standalone entity has recorded a 3% revenue decline on a 1H to 1H basis.
— Avinash
I mean not for the second quarter, even if I look on a 1H to 1H basis, even then there's a 3% decline?
— Avinash
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Q&A — 10 exchanges
Q
Congratulations on good set of numbers. So firstly, if you can call out how the different brands have performed during the quarter? Because seeing the wholesale numbers, I think so Arrow and Flying Machine are still under pressure. So if you can first call out how the different brands have performed? And secondly, any read on the festive? I think Amisha gave a brief around the festive, but if you can further talk about how the festive has been?
Amisha Jain
Sure. So I think if you look at our brand portfolio, as you have seen, we've clocked a pretty strong sustained growth across the portfolio at 11.3%. And if you look at from that, the key driver of the growth is obviously coming also from our direct channels. Coming down to -- and that includes both our retail and our B2C channel. And this is in line with our growth drivers and the strategy that we've put together. Now coming down to the brand, U.S. Polo has clocked an extremely strong double-digit growth, which is close to 20% upwards. And while -- this has been driven by a lot of work that ha
Q
First, on the question of with a strong SSG growth of 8%. Along with -- coupled with gross margin expansion of 200 bps, why don't we see that percolating down to the EBITDA margin expansion? I mean this model has a significant operating leverage. We understand that. And I also heard that we have been investing into advertisement. What are the core pockets post gross margin, which are dragging down the changeover that is required to be seen with SSG coming in as well as with the gross margin expansion?
Girdhar Chitlangia
Priyank, this is Girdhar. You see the large part of the growth in quarter 2 came from the direct channels, retail and online B2C, both have an attendant commission as a cost, which becomes part of the sellex. So the flow-through is after that. We also continue to invest in marketing, which was higher again by 20 basis points. Having said that, I think our focus has been to reduce discounting, which reduced -- which we improved in the last quarter. And going ahead, we will continue to focus on the same. Cost improvement is another lever which we continue to work on. But what is taking away the
Q
Congratulations on good set of numbers. So my question is regarding the standalone business. If you look at it, like that's the one which operates the Arrow wholesale entity. So that segment has reported 3% of decline on the 1H to 1H basis. So what would be the reason behind that?
Girdhar Chitlangia
Avinash, this is Girdhar here. Can you repeat the question, please? Speaking for the standalone entity. So the standalone entity has recorded a 3% revenue decline on a 1H to 1H basis. So what would be the reason behind this? Standalone is the one that operates Arrow business, right? Yes. So for the first half of FY '26, the stand-alone entity delivered INR350 crores of revenue. This was down 1% Y-o-Y? Avinash, the primary reason Arrow, of course, the retailing is -- you're aware, is based in the subsidiary, right? This represents primarily the wholesale business. And as Amisha said earlier and
Q
So my first question is on the overall apparel sector. So we have seen that last year, it was largely impacted by cut in the discretionary spends. But now there seems to be a growth momentum coming in, especially for the premium brands, even like other premium retailers have also highlighted a similar trend. So is my understanding overall correct about the premium segment? Like I understand that there has been personal tax cut, and the recent GST cut, which is definitely aiding growth. But apart from that, is there any other consumer sentimental shift that is happening or there are a few inter
Amisha Jain
So as you can see, we've obviously continued to clock pretty solid growth. And if you look at our H1 between Q1 and Q2 both, I think we've seen consistent growth. Now there are 2 parts to it. Yes, there has been a macro impact. So from a stimulus provided from the tax cuts that have come in and also very recently with the GST reforms coming in, we do believe that this puts sort of a stimuli behind the consumer demand in general, and we're expecting that this will continue in the medium term. So that's one part of it. Having said that, from our perspective, we have always been talking about one
Q
And congratulations on a good set of numbers. Just wanted to understand, so our adjacent categories have seen a strong growth of, say, 20% plus during the quarter. Can you highlight how the performance has been for the core apparel business for U.S. Polo and Tommy CK? And do the adjacencies, as you explained for the footwear, do other adjacencies have any substantial presence beyond our EBOs? And if so, then how is the performance over there?
Amisha Jain
So if you were to look at our brand portfolio, while we've clocked a very hefty growth overall, U.S. Polo continues to clock upwards of 20% growth. And that is also coming on the back of everything that has gone into it. So from product innovation, premiumization, retail expansion. And that is obviously coming from the core part of the brand, . The core part of the portfolio is actually hitting it quite hard right now. So it's not just the adjacent categories that's driving growth in U.S. Polo, but overall growth is being driven from there. And in terms of Tommy and CK, I think like we said, I
Q
I have 3 questions. First is on Flying Machine. So there is an improvement in the LTL growth there. Just wanted to understand the initiatives that are driving the improvement in that brand?
Amisha Jain
Sure. So I think see Flying Machine has been a journey over the last couple of years. And with Flying Machine, what is heartening to see is that we believe the brand’s growth is going in the right direction. As we sharpen our positioning, we actually have gone ahead and improved the product range that is out there, and we are also looking at the channel to serve from a consumer point of view. So from all of that perspective, Flying Machine has been a complete 360 effort. And we seem to be seeing is solid like-to-like sales and a good initial indicator from our overall retail and a channel port
Q
Congrats for great set of numbers. Most of my questions have been answered. I have a few -- couple of questions. First on Amisha's initial comment of inventory freshness, which is at all- time high of 85%. So, I would like to hear from you, what was it earlier? And just your thought on how it is helping you or what led to this inventory freshness or what are the strategies which is helping you this freshness and whether this strategy is only pertaining to a few brands like U.S. Polo, Tommy Hilfiger or it is across your portfolio of brands?
Kulin Lalbhai
Maybe I'll take this question since I can answer on the transformation journey over the last 3 years. I think this has been the heart of the transformation effort that the whole team has worked on, which is getting the fundamental flow of inventory right. And that means, one, starting with really creating strong, differentiated, elevated products. I think across the portfolio, a lot has gone into getting the product engine to really fire. And closely associated with that is to really drive full price sell-through. I think we have seen a significant improvement. In some brands, the sell-through
Q
I have 2 questions. First is regarding second half. So given that we have added around 50, 53- odd stores in the first half, are we in a comfortable situation to add maybe 100 stores in the second half? As we've laid out, retail expansion is a very critical part of our strategy, and that kind of includes 3 things. We want to go after renovating, relocating and upsizing as deemed right from a market and catchment point of view. So that's the fundamental thing we are behind. Now as we look at our BD and as we look at our retail expansion for H2, the answer to your question is we've doubled down
Varun Singh
So, Amisha, I think 150 store addition guidance and maybe 70-odd store closure, which is what has happened in FY '25, I mean gross addition was 120 and 74 was store closure. So 1.2 or 0.12 million is what we added. In FY '26, I think we are supposed to add 0.17 million square feet, not 0.15. And in case you say 0.15, then does that mean that we are reducing the guidance? So, we are in line to what we guided earlier. We added 74,000 in H1, and we are pretty confident that we will add the rest of it. Okay. Okay. So roughly 100-odd stores, we should be able to add in second half? We are working t
Q
Girdhar, you mentioned that employee cost on a Q-on-Q basis would have been 10% higher otherwise, if not for that the management change. So if we adjust for that, the gross margin -- the EBITDA margin expansion would have been close to 90 basis points. And is that the sustainable number which you are, let's say, shooting for at least for this current fiscal moving forward as the employee cost normalizes?
Girdhar Chitlangia
I mean mathematically, what you're saying is right, Rajiv. Yes, maybe I can come in here. I think the last 3 years, we have consistently been more than 100 bps operating leverage in this business. And one slight difference in the next 3 years, I would say, is while fundamentally, we can continue in that trajectory because we've got further operating leverage coming in and some of the lower-performing brands are moving up faster, we intend to up our marketing spend. And that's, I think, something we have mentioned in the last couple of quarters that our percentage of marketing as a percentage o
Q
Thank you, everybody, for joining the call today. If you have any more questions, please feel free to reach out to us, and we would be happy to answer them offline. Have a good day.
Management
Speaking time
Girdhar Chitlangia
17
Amisha Jain
17
Kulin Lalbhai
15
Moderator
12
Avinash
8
Nihal Mahesh
7
Varun Singh
6
Priyank
5
Ashutosh
5
Deep Shah
3
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Opening remarks
Girdhar Chitlangia
Thanks, Huda. Hello. Welcome, everyone, and thank you for joining us on the Arvind Fashions Limited Earnings Conference Call for the second quarter ended 30th September '25. I'm joined here today by Kulin Lalbhai, Vice Chairman and Non-Executive Director; and Amisha Jain, Managing Director and CEO. Please note that results, press release and earnings presentation have been mailed across to you yesterday, and these are also available on our website, www.arvindfashions.com. I hope you had the opportunity to browse through the highlights of the performance. We will commence the call with Kulin providing his key strategic thoughts on our second quarter's performance. Post that, Amisha will cover the financial performance and also the business highlights. At the end of the management discussion, we will have a Q&A session. Before we start, I would like to remind you that some of the statements made or discussed on this call today may be forward-looking in nature and must be viewed in conjun
Kulin Lalbhai
A very good afternoon to you all. Thank you for joining us for the Q2 results. We are pleased to share that AFL delivered a consecutive quarter of double-digit revenue growth and the highest ever sales and EBITDA this quarter. The demand environment was stable, and we achieved an 11.3% growth led by a healthy 8.3% LTL in our retail channel and around 25% plus growth in our online channel, leading to over 18% growth in EBITDA to INR200 crores, which is an 80 bps margin expansion. During the quarter, the government implemented the GST 2.0 reform. A large part of our portfolio has moved to a lower GST rate, and we have ensured that the GST benefit has been passed on to our consumers. We believe that the GST reforms will surely improve customer demand in the medium term. We continue to stay focused on profitable growth, which is helping us deliver on our balance sheet and cash flow KPIs as well with overall working capital continuing to stay stable. We are leaning into our growth drivers a
Amisha Jain
Good afternoon, everyone. Warm welcome to the investor call for the quarter ended September 30, 2025. In the quarter gone by, NSV stood at INR1,418 crores as against INR1,273 crores in the previous year same quarter. And EBITDA was INR200 crores versus INR170 crores. In this quarter, AFL delivered yet again an impressive double-digit revenue growth of 11.3% and EBITDA growth of 18.2%. The direct channels contributed significantly to this growth. Our continued strong efforts to grow direct channels of retail and B2C yielded good outcomes in the quarter. These together now account for nearly 50% of sales, a 5% point higher share over last year. Retail growth is very healthy at 14% with a very good L2L of 8.3%. Retail growth across all brands was in double digit. We added over 36,000 square feet of retail space in the quarter. Online B2C grew by over 50%, taking its share to 12%, while B2B and other channels, the share dropped to 20% from 22% last year. This is in line with our strategy t
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