Arvind Fashions narrows loss to Rs182cr in Q1; Sock ends lower

The company registers strong recovery across channels in Q1FY22. Revenue grew by 340% to Rs319cr.

Aug 06, 2021 04:08 IST India Infoline News Service

Arvind Fashions Limited (AFL), India’s leading casual and denim player, has declared its financial results for the first quarter ended June 30, 2021. Q1FY22 revenue grew by 340% to Rs319cr over Q1FY21. This was driven by robust recovery across the channels and continued rapid growth in the online channel. Recovery was 48%, compared to pre-COVID levels of Q1FY20. Loss reduced to Rs182cr in Q1FY22 compared to a loss of Rs213cr in Q1FY21.

“On account of localized lockdowns caused by the COVID second wave, sales were significantly impacted in Q1. Recovery continues to be strong, reaching ~80% in Jul’21, compared to same month pre-COVID (Jul’19),” the company said in a filing.

Power brands grew by ~400% with significantly improved profitability on yoy basis. Online channel sales increased by 4.2x yoy in Q1FY22; direct-to-consumer (D2C) business contributed 30%+ of online sales.

Arvind Fashions Ltd ended at Rs213.10 per piece down by Rs7.6 or 3.44% from its previous closing of Rs220.70 per piece on the BSE.

“Significant cost rationalization measures across rentals, employee costs & other fixed expenses led to reduced EBITDA loss of Rs25cr compared to loss of Rs33cr in Q1FY21. Continued journey towards strengthening of balance sheet with Gross working capital reduced (qoq) by 32cr in Q1FY22 through sharper controls around inventory & debtors; GWC lower by 426cr (yoy). Reduction in gross debt by 30cr and 430cr compared to Mar’21 and June’20 respectively,” it said.

The company signed definitive agreement in July’21 for strategic sale of assets of ‘Unlimited’ retail business to V-Mart Retail Ltd. in an all cash deal. Transaction closure is expected within Q2FY22.

“Employees safety remained our priority during second wave. Our business remained far more resilient during current quarter compared to last year, led by measures on cost control and cash flow management. Robust sales recovery compared to pre-COVID shows the strong customer pull for our 6 high conviction brands that remain highly suited for post-COVID & WFH norms. Digital initiatives backed by omni-channel capabilities is helping in stronger sales recovery. We remain very optimistic of improved financial performance as business returns to normal in coming quarters,” Shailesh Chaturvedi, MD & CEO, said.

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