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• Revenue: INR 3,431 crores for nine months of FY '25, indicating a growth of 8.5%.

• EBITDA: INR 174 crores in Q3, with a YTD EBITDA of INR 467 crores, reflecting a growth of nearly 18%.

• EBITDA Margin: Improved by 110 basis points, reaching 14.5% of NSV in Q3.

• Gross Profit Margin: Increased by 160 basis points to 55% in Q3.

• Same-Store Sales Growth: Double-digit like-to-like retail growth at 11% in Q3.

• Retail Channel Growth: 15% growth in Q3, driven by like-to-like growth and square foot expansion.

• Return on Capital Employed: Improved to over 19%.

• Net Working Capital Days: Remained at a healthy 60 days.

• Inventory Reduction: Inventory value decreased by nearly INR 40 crores over September '24.

• Debtor Reduction: Debtor value decreased by nearly INR 180 crores post-festival trading.

• PAT Growth: 133% growth for continuing businesses YTD.

• Free Operating Cash Flow: Positive generation with an asset-light model and tight balance sheet control.

• Warning! GuruFocus has detected 3 Warning Sign with BOM:542484.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Arvind Fashions Ltd (BOM:542484) reported a 7% sales growth in Q3, with a strong like-to-like growth of 11%, leading to the highest-ever EBITDA of INR 174 crores.

• The company achieved a significant improvement in return on capital employed, crossing 19%, with plans to exceed 20% in the medium term.

• Retail channel growth was robust at 15%, driven by increased advertising, square foot expansion, and successful celebrity collaborations.

• The gross profit margin improved by 160 basis points to 55% in Q3, aided by reduced discounting and a richer channel mix favoring direct channels.

• Arvind Fashions Ltd (BOM:542484) maintained tight control over working capital, with inventory days reduced by 5 days and debtor value down by INR 180 crores post-festival trading.

Negative Points

• The wholesale channel experienced a quarterly moderation due to the exit from some department store formats and destocking in muted market conditions.

• Footwear growth was impacted by BIS implementation, affecting inventory levels and assortment.

• Despite improvements, the company still faces challenges in achieving higher profitability for brands like Arrow and Flying Machine.

• The transition from B2B to B2C in the online channel is ongoing, with B2B expected to decline by 10-12% as B2C grows.

• The company is still working on optimizing its store portfolio, with closures of smaller, less profitable stores and delays in opening new large-format stores.