ARVINDFASNNSEMay 13, 2026

Arvind Fashions Limited

8,584words
94turns
12analyst exchanges
3executives
Management on call
Kulin Lalbhai
VICE CHAIRMAN AND NON-EXECUTIVE DIRECTOR
Amisha Jain
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Girdhar Kumar Chitlangia
CHIEF FINANCIAL OFFICER
Key numbers — 40 extracted
14.8%
tcomes. I am very happy to share that this quarter we have again achieved a very strong growth of 14.8% and a full-year growth of 14%. This highlights our disciplined execution across all growth driv
14%
that this quarter we have again achieved a very strong growth of 14.8% and a full-year growth of 14%. This highlights our disciplined execution across all growth drivers, enabling us to successfully
rs,
and a full-year growth of 14%. This highlights our disciplined execution across all growth drivers, enabling us to successfully deliver our FY '26 objectives that we had set at the beginning of the
7.8%
consistent and superior retail execution have enabled us to deliver a very healthy LTL growth of 7.8% in retail and over 40% growth in the online direct-to-consumer channel. Our EBITDA grew by 19%
40%
retail execution have enabled us to deliver a very healthy LTL growth of 7.8% in retail and over 40% growth in the online direct-to-consumer channel. Our EBITDA grew by 19% with a 50-bps margin expa
19%
7.8% in retail and over 40% growth in the online direct-to-consumer channel. Our EBITDA grew by 19% with a 50-bps margin expansion. Our PAT on a comparable basis has grown by 56% in Q4 and 62% in F
56%
Our EBITDA grew by 19% with a 50-bps margin expansion. Our PAT on a comparable basis has grown by 56% in Q4 and 62% in FY '26, which shows strong operating leverage in our business. We have also achi
62%
w by 19% with a 50-bps margin expansion. Our PAT on a comparable basis has grown by 56% in Q4 and 62% in FY '26, which shows strong operating leverage in our business. We have also achieved the miles
23%
g operating leverage in our business. We have also achieved the milestone of generating more than 23% return on capital employed, which remains our North Star metric, and this is likely to improve go
40 bps
with key highlights. FY '26 was a year of profitable broad-based growth with 14% revenue growth, 40 bps EBITDA margin expansion, PAT up 62% on a comparable basis, and ROCE crossing 23%. Importantly, th
300 basis point
today's call: 1. Our D2C engine is compounding. Direct channels now account for 56% of sales, up 300 basis points year-on-year. Online B2C alone grew 40% in Q4. 2. Profitability is structural. Gross margin is u
40 basis point
are entering FY27 with confidence. We expect to sustain mid-double-digit growth with another 30 -40 basis points of EBITDA margin expansion, despite a more uncertain macro. Coming back to Q4 performance.
Guidance — 20 items
Amisha Jain
opening
“We expect to sustain mid-double-digit growth with another 30 -40 basis points of EBITDA margin expansion, despite a more uncertain macro.”
On profitability
opening
“We expect mild pressure on 4 certain raw materials, forex, and capex over the medium term, with the risk of a consumption slowdown due to supply-led inflationary pressures.”
On profitability
opening
“Lastly, to navigate the volatility, we plan to remain nimble.”
On profitability
opening
“We intend to double down on our cost control measures, and we will selectively implement price increase while safeguarding growth.”
On profitability
opening
“We aim to deepen our leadership in menswear by establishing a top position in the country's 5 largest apparel categories: shirts, polos, denim, t-shirts, and blazers, while doubling down on adjacencies like footwear and innerwear that are already contributing 24% of our business.”
On profitability
opening
“Hence, we expect growth from each of our brands.”
On profitability
opening
“• Building a digital powerhouse through our dotcom and marketplace partnerships: We expect each brand to have its own dotcom and app live this fiscal year, which will be the foundation for great brand experience and commerce.”
On profitability
opening
“Our investments will target 2 outcomes: • Leveraging AI to drive cost efficiencies across functions; • Leverage analytics and AI to drive front-end effectiveness.”
Deep Shah
qa
“First of all, on the guidance which you have given around mid-double-digit growth, I just wanted to know if you can help me and give me some colour around the brand-wise performance, because this year, if we see U.S.”
Deep Shah
qa
“Polo has been a standout performer throughout the year for us, should we expect the same sort of growth for U.S.”
Risks & concerns — 11 flagged
We expect to sustain mid-double-digit growth with another 30 -40 basis points of EBITDA margin expansion, despite a more uncertain macro.
— Amisha Jain
• Arrow was subdued due to a onetime model change and a weak wedding calendar.
— On Channel performance
We expect mild pressure on 4 certain raw materials, forex, and capex over the medium term, with the risk of a consumption slowdown due to supply-led inflationary pressures.
— On profitability
A nimble supply chain that sits closer to demand, which should yield shorter cycles, faster reads, and less inventory risk.
— On profitability
So shouldn't we consider margins to remain under pressure?
— Deep Shah
See, at this point in time, like I had mentioned earlier that while we are seeing mild pressure on raw materials, forex, capex over the medium term, we do expect that there could be a potential risk of a consumption slowdown due to the inflationary pressures.
— Amisha Jain
And given that, we are -- at this point in time, cautious and at the same time, optimistic about our guidance.
— Amisha Jain
There has been some amount of pressure on the value brands and some amount of pressure on the mid- premium price brands.
— Abhijeet Kundu
Now coming to your question on the PVH side, there definitely was an impact of GST from a slab movement to about 18%, these are the brands that got impacted and we did see an initial and a transitory impact.
— Amisha Jain
So we were really extra cautious and, inwarded a lot of our SS26 merchandise before March.
— Girdhar Chitlangia
But you have also flagged out the inflationary pressure as a risk to consumption.
— Jaymin Shah
Q&A — 12 exchanges
Q
Congratulations on a good set of numbers. First of all, on the guidance which you have given around mid-double-digit growth, I just wanted to know if you can help me and give me some colour around the brand-wise performance, because this year, if we see U.S. Polo has been a standout performer throughout the year for us, should we expect the same sort of growth for U.S. Polo continuing in the years to come? And how do we see growth brand wise coming in the future period?
Amisha Jain
Thanks for your question. I think as we have seen our portfolio, and like I mentioned earlier, we are committed to building a portfolio of differentiated brands, and each of our brands have a very specific role to play. As w have seen, U.S. Polo is obviously ahead of the curve, and it has now reached its potential with product innovation, right product-market fit, a great retail presence, and it continues to clock solid growth across our channels. Having said that, our PVH portfolio is really well poised to service the premium end of the consumer demand, and we expect that this portfolio will
Q
Congrats for a good set of numbers. My question is on online B2C business. So that part of our business is doing extremely well. This quarter also, we have seen strong growth. So, considering the competition building around in this space or in this channel, do we see this growth momentum to continue or what is helping us to be a standout player in this particular channel, and are we doing extremely well in terms of growth?
Amisha Jain
Thanks for your question. I think one thing I'd say broadly is D2C is a core channel strategy for us. Like I said, that overall, as we look forward, building a world-class D2C organization that is built of retail and online is a priority for us. We have key initiatives in place to drive our D2C. So, whether you think about product, the way our brands show up, how we control our pricing, and how we manage our last mile, these are the certain few things that is actually driving growth for us. Over the years, we've also been able to actually drive full-price sell-through and reduce our discounts
Q
Congrats on good set of numbers. So this year, both Flying Machine and USPA have seen a very significant rebound. So what are the things that you could highlight for this rebound? What are the changes that have happened in these 2 brands, Flying Machine in particular?
Amisha Jain
Sure. Thank you so much. I think I'll talk about both the brands - one at a time. So when we look at Flying Machine, as you know that we've just gone through a very recent, sharper positioning and deeper work with Flying Machine. Hence with that, the one thing that we've done is actually gone deeper with how we drive consumer connect. Flying Machine is now positioned as an on-trend youth brand, which is more focused on denim and also pivoting towards a unisex offering. Now what that does is what we have seen is that in initial season which we've launched there is a great offtake across our cha
Q
Congratulations on a great set of numbers. One was on the overall macroenvironment in the sense that we have been seeing that premium brands have been growing at a better rate. There has been some amount of pressure on the value brands and some amount of pressure on the mid- premium price brands. So wanted your view on that and how the overall scenario has evolved because March Quarter, there has been some amount of recovery -- perceived recovery in apparel and fashion brands. So just wanted a view on that. And then secondly, you have been -- I mean, out of all the denim brands, a single brand
Amisha Jain
Thank you so much. I think on your first part, premiumization has been a trend for us, and we've seen that both across our brands something that has paid off very well for us. Our brands have actually premiumized while at the same time ensuring great value at fabulous prices. So from that point of view, all our brands, when you look at our PVH brands or you look at U.S. Polo, Arrow, Flying Machine, from a premiumization trend point of view, we're definitely seeing that consistently quarter-over-quarter. So the question that you asked first, I think that trend is something that we expect to con
Q
Just a bookkeeping question. Why our reserves have declined Y-o-Y by about INR13 crores?
Girdhar Chitlangia
Because we did this transaction with Flipkart and there was some equity adjustment because of that.
Q
Congratulations on a great set of numbers. Just wanted to check on what is our store expansion plans for FY '27. And secondly, in terms of our adjacencies, we are already at 24%. So, from here on, while you're guiding for mid-double-digit growth for FY '27, but is it the fourth portfolio which will have to do the heavy lifting from now on, considering that on adjacencies, we are already at 24% or do you think that adjacencies will continue to grow?
Amisha Jain
So, the first question you asked is around the store expansion for the next fiscal year? Yes. Like I mentioned earlier, when you look at our store fleet, we do believe that there's a great opportunity for us to expand our store fleet, at the same time, upsize our stores as well, because our offering is increasing and our consumer offtake of some of our brands is also great. So we expect to drive about 1.5 lakhs net square feet addition over the next fiscal year across our portfolio. That's answering your question number one. On your second question, see, the way we look at our brandswhat we ar
Q
Just wanted to know that what is the size of the business we have for footwear in FY '26? How many stores we opened in FY '26 and how many stores do we plan to open in the coming year FY '27-'28 and how many stores are there for Stride…
Amisha Jain
I think broadly speaking, if I were to talk about the adjacency growth, our adjacent category has grown at 25%, and it is now sitting at about a 24% share of our business. Hence we expect the adjacent parts of their categories also to continue to grow as well. In terms of our growth, like I said, we are expecting to expand at a portfolio level to about 1.5 lakh net square feet addition next year. We don't give out brand-wise numbers, so hopefully, the 1.5 lakh net square feet helps you. Okay. If you can help me with the footwear side, the size of the footwear business that we will begin at the
Q
Inventory days have increased by nearly 20 days over the last 2 years. So what is leading to this inventory day increase, while at the same time, you are commenting that the inventory is the freshest ever? So what's changed out here?
Girdhar Chitlangia
Ankit, Girdhar here. You see inventory days is a function of channel mix. And as we will increase our channel towards more D2C, which is basically retail and B2C, the inventory will sit in our books. In a wholesale business, it actually moves out of our books. So correspondingly, if you see, while our inventory days has gone up over last 2 years, receivable days also has correspondingly reduced. 14 All in all, it's a balancing within the GWC section within the balance sheet. As we increase and focus our energies on the D2C business this is likely to remain like this or maybe increase a little
Q
A couple of questions. What is the share of adjacency we are targeting in the coming years? And if that share further increases, would the margin see more expansion? Is that the right understanding? Secondly, on Tommy Hilfiger and Calvin Klein, any major cost pressures we are seeing? What is the price hike mechanism, the frequency of price changes? And something on Arrow, I think in the PPT, you have mentioned some new products in linen. So are they launched? What kind of products are we looking at, if you could give us some sense? These were my 3 questions. 15
Amisha Jain
To your question on gross margins, I think we do believe that with our work, overall, I'd say that over a period of time, we would like to take this to high 50s and it's not just about the adjacencies, but overall, we believe that there is some headroom for growth over here. As we drive full-price sell-throughs through our consumer analytics, etc., we do believe that we should be able to drive that. Now coming to your question on the PVH side, there definitely was an impact of GST from a slab movement to about 18%, these are the brands that got impacted and we did see an initial and a transito
Q
The question is, I think the previous participant has asked on growth in the inventory. So if we just compare FY '25 inventory with '26, there is almost more than 30% growth. And historically, we have not seen a similar kind of a growth given the change in the business mix and the revenue growth that we have delivered. 16 And honestly, I mean, if we look at FY '25 and '26, the mix of the business in terms of revenue looks not significantly different. So in front of 15% revenue growth, 30% inventory growth, please help us deconstruct maybe how to look at it?
Girdhar Chitlangia
Varun, as I said earlier, you cannot look at the full-year number. You will have to look at a quarter- on-quarter number, which is more representative of how the inventory is moving. So our channel mix has changed by 3% towards the direct, that itself is almost 6 days impact. As we also mentioned in our investor deck as well as Amisha mentioned in her opening comments, we had an early inwards, which is also to mitigate some of our basic risks that we saw. If you recollect our previous call, we had mentioned that there were delays on account of the geopolitical issues, Bangladesh shipments, and
Q
Amisha, I have one question for you. When you say you will be open to something strategic at a portfolio level, does that imply that the current portfolio alone may not be sufficient to deliver the growth momentum that you are targeting at the Company level? Also, given the capabilities of the Company, can you elaborate more on your thoughts on build versus buy strategy?
Amisha Jain
Sure. So I think one thing that I do want to highlight is that our overall plan is around driving growth through our own 5-brand portfolio and the strategy that I've just laid out in my opening comments, which is our own organic growth around 15%. That's what we've spoken about in the mid-double digit . The only thing that I've highlighted is that the question on are we open? Yes, if something comes which is more relevant from a strategic direction point of view and it looks like something that will allow us to double down from a capability or from a future growth point of view, we might look
Q
Thank you, everybody, for joining the call today. If you have any questions, please feel free to reach out to me, and we would be happy to answer them offline. Thank you so much. Have a good day.
Management
Speaking time
Amisha Jain
27
Moderator
14
Girdhar Chitlangia
13
Avinash Karumanchi
6
Ankit Kedia
5
Varun Singh
5
Deep Shah
4
Kaustubh Pawaskar
3
Naveen
3
Prakash Kapadia
3
Opening remarks
Girdhar Chitlangia
Thanks, Swapnali. Hello, everyone. Good afternoon. Thank you for joining the Arvind Fashions Limited earnings call for the quarter and year ended March '26. I'm joined here today by Mr. Kulin Lalbhai, Vice Chairman and Non-Executive Director; and Ms. Amisha Jain, Managing Director and CEO. Please note that results, press release, and earnings presentation have been mailed across to you, and these are available on our website, www.arvindfashions.com. I hope you've 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 quarter and year's performance. Post that, Amisha will cover the financial performance and 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 conjunction with risks and un
Kulin Lalbhai
Thanks, Girdhar. A very good afternoon to you all. Thank you for joining us for the Q4 results. FY '26 continues our trajectory of impressive growth and high-performing business outcomes. I am very happy to share that this quarter we have again achieved a very strong growth of 14.8% and a full-year growth of 14%. This highlights our disciplined execution across all growth drivers, enabling us to successfully deliver our FY '26 objectives that we had set at the beginning of the year. The demand environment remains stable. Investments in brand and people and our consistent and superior retail execution have enabled us to deliver a very healthy LTL growth of 7.8% in retail and over 40% growth in the online direct-to-consumer channel. Our EBITDA grew by 19% with a 50-bps margin expansion. Our PAT on a comparable basis has grown by 56% in Q4 and 62% in FY '26, which shows strong operating leverage in our business. We have also achieved the milestone of generating more than 23% return on cap
Amisha Jain
Good afternoon, everyone, and a warm welcome to our investor call for Q4 and the full year ended March 31, 2026. Let me start with key highlights. FY '26 was a year of profitable broad-based growth with 14% revenue growth, 40 bps EBITDA margin expansion, PAT up 62% on a comparable basis, and ROCE crossing 23%. Importantly, this was not driven by a single channel or brand. It was execution across the Board. Three things I would like for you to take away from today's call: 1. Our D2C engine is compounding. Direct channels now account for 56% of sales, up 300 basis points year-on-year. Online B2C alone grew 40% in Q4. 2. Profitability is structural. Gross margin is up, EBITDA is up, ROCE at a new high, and the inventory is the freshest it has ever been. 3. We are entering FY27 with confidence. We expect to sustain mid-double-digit growth with another 30 -40 basis points of EBITDA margin expansion, despite a more uncertain macro. Coming back to Q4 performance. Q4 revenue grew 14.8% with NS
On Channel performance
3 • We delivered a robust LTL of 7.8% in retail, with overall retail growing at 14%. Retail growth was impacted by a transitory GST rate change impact on PVH brands for a few weeks. That dip is behind us----both brands are back to double-digit growth. • Online B2C grew over 40%, taking its share to 14% from 11%, which is in line with our intent to pivot away from B2B online. • Wholesale and department stores delivered strong double-digit secondary sales growth as well. • 50 EBOs were added in the quarter. On Brand performance. • USPA led the pack, delivering its highest-ever growth this quarter. • PVH brands and Flying Machine each grew over 10%. • Arrow was subdued due to a onetime model change and a weak wedding calendar. Both are timing-related and not structural. I'd like to highlight that Flying Machine deserves a special mention. Flying Machine clocked retail LTL of double digits and a B2C growth of 70%. We have sharply positioned Flying Machine as a unisex denim-anchored, on-tre
On profitability
• • EBITDA margin is at 13.4%, up 40 basis points year-on-year; PAT at INR124 crores, up 62% on a comparable basis; • ROCE at 23% plus is a multiyear high, and in my view, the single best indicator of how our business is consistently improving. FY 27 Outlook & Vision As we enter fiscal '27, I would like to take the opportunity to talk about 2 things. First is on the macro- Government measures around GST, interest rates, and income tax have supported demand. The West Asia situation is a watch item for us. We expect mild pressure on 4 certain raw materials, forex, and capex over the medium term, with the risk of a consumption slowdown due to supply-led inflationary pressures. Our mitigation actions are already in motion. A couple of points to highlight there. • We bought inventory slightly ahead of the curve for SS26, locking in costs before the increase. • • • For AW26, we are actively monitoring and hedging where required. Sourcing remains predominantly India-based, and we are deepenin
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