Synopsis:
The textile and lifestyle retailer delivered steady growth with expanding core and adjacent categories, strong D2C momentum, and improved profitability. Focused on brand visibility, retail expansion, and operational efficiency, it targets double-digit revenue growth, margin improvement, and a stronger return profile, supported by premium brand performance and strategic execution.
India’s textiles sector is a jobs powerhouse and export engine, contributing about 2.3% to GDP and 8.21% of India’s total exports in 2023–24, with exports of roughly US$34.4 billion and the US/EU taking ~47% share. The market is ~US$184 billion in 2024–25, with exports ~US$37 billion, and rising on PLI, PM MITRA parks, and technical textiles momentum.
With a market capitalization of Rs 6,872.60 crore, the shares of Arvind Fashions Ltd were trading at Rs 514.85 per share, decreasing around 1.93 percent as compared to the previous closing price of Rs 525.00 apiece.
ICICI Direct, one of the well-known brokerages in India, gave a ‘Buy’ recommendation on the textile stock with a target price of Rs 705 apiece, indicating a potential upside of 37 percent from Friday’s price of Rs 514.85 per share.
As per the brokerage, AFL’s core brands, including US Polo, Tommy Hilfiger, and Calvin Klein, showed robust double-digit growth in Q2FY26, with Arrow steadily recovering and Flying Machine benefiting from repositioning. Adjacent categories grew 22% YoY, with footwear rising over 25%. The company is targeting to double adjacent category revenues to ₹700 crore by FY28, focusing on product differentiation and customer experience.
Additionally, AFL reported 11% revenue growth in Q2FY25, driven by strong performance across direct channels. Retail saw 14% growth, and online D2C surged 67%. The festive period boosted D2C growth, and a retail expansion strategy is expected to add 75,000-80,000 sq.ft by H2FY26. Despite flat wholesale sales, the company aims for a 13% CAGR from FY25-28E.
Looking forward to the company’s financial performance, revenue increased by 11 percent from Rs 1,273 crore in Q2FY25 to Rs 1,418 crore in Q2FY26. Further, during the same time frame, net profit increased by 24 percent from Rs 45 crore to Rs 56 crore.
The company targets 12–15% revenue growth in FY26, driven by adjacent category expansion and improved margins through operating leverage. It plans to boost brand visibility via higher ad spends, expand direct channels, and open around 150 new stores. Focus remains on working capital efficiency, stronger free cash flow, and improving ROCE through an asset-light strategy.
Arvind Fashions Ltd is a leading player in India’s branded apparel and lifestyle retail sector. The company houses renowned global and domestic brands such as US Polo Assn., Tommy Hilfiger, Calvin Klein, Arrow, and Flying Machine, offering fashion-forward products across categories through its strong retail and online presence.
Written by Abhishek Singh
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