In Short:
Arvind Ltd is expanding its advanced materials division for sectors like defence and aerospace by creating Advanced Material Ltd. The company plans to diversify its product portfolio, add capacities, and explore new customer segments for growth. It aims for double-digit revenue growth and plans to invest around ₹400-500 crore in FY25. The traditional textile business may grow with India’s GDP, while the advanced materials business is expected to grow over 20% annually.
Arvind Ltd to Drive Growth in Advanced Materials Division
Arvind Ltd, a well-known name in denim and apparel brands, is gearing up to enhance its advanced materials division by delving into innovative textile applications for sectors like defence, aerospace, and other infrastructure segments.
The Birth of Advanced Material Ltd
In a strategic move, all units under the advanced material segment were amalgamated into a separate entity, **Advanced Material Ltd**, in FY24. This restructuring aims to provide focused attention to this segment and propel business growth. According to Chairman Sanjay Lalbhai, this shift will facilitate addressing growth imperatives, seizing new opportunities, and ensuring transparent progress reporting.
Future Plans and Investments
The company’s vision for the future includes diversifying the product portfolio, expanding capacities, exploring new markets, and tapping into fresh customer segments for organic growth. Additionally, there are plans for inorganic growth opportunities. The investment in the advanced material business is anticipated to yield double-digit growth in the company’s revenue.
In the upcoming fiscal year, Arvind Ltd intends to allocate around ₹400-500 crore for enhancing capacities in its advanced materials division, garments, and modernizing its fabric base. The advanced material segment encompasses diverse products such as human protection fabric and garments, industrial goods, advanced composites, and automotive fabrics.
Financial Performance and Outlook
In the previous fiscal year, Arvind Ltd recorded a net profit of ₹336 crore with revenue amounting to ₹7,738 crore. While the textile segment’s revenue witnessed a decline, the advanced materials segment showcased a growth of over 14%, contributing more than 18% to the total revenue.
The company’s capacity expansion endeavors and forays into new segments like defence have paved the way for future growth. Human Protection revenues saw an upsurge due to strengthened relationships with key clients and increased traction in the Middle East.
Outlook:
Despite challenges in the textile industry, Arvind Ltd remains optimistic about the medium term and plans to sustain investments in growth initiatives. Market dynamics are expected to vary, with domestic markets showing signs of improvement while US volumes may witness modest growth. Demand from Europe and UK is projected to remain subdued unless favorable trade agreements are secured. The traditional textile business is anticipated to align with India’s GDP growth, whereas the **AMD** business is poised for over 20% annual growth.
