Arvind profit falls 36% in Sept qtr as textiles drag despite low costs

Indian textiles and leather goods maker Arvind on Tuesday reported a 36% fall in second-quarter profit, hurt by slow demand pickup in fabrics amidst inflationary pressure.

The company’s consolidated net profit fell to 800.1 million rupees ($9.6 million) for the quarter ended Sept. 30 from 1.25 billion rupees a year ago.

Textile companies have hit a rough patch due to low cotton arrivals, higher import duty and energy costs, and an inventory pile-up, analysts said.

Also, demand in the U.S. and European markets has yet to rebound.

Revenue at Arvind, which houses brands like Calvin Klein and Tommy Hilfiger, fell 11.4%, although expenses also declined 12% helped by lower raw material costs.

The company said revenues fell primarily on account of price deflation acting in tandem with lower input costs.

Arvind’s profit in its core textiles division fell 17.3%, while that in its smaller segment, advanced materials, rose 13%.

The company saw low price realisations in its woven segment due to sluggish demand.

During the quarter, key export markets saw muted demand as customers continued to be cautious.

However, the company expects volume to pick up in the second half of the financial year that ends March 31.

Shares of Arvind rose 7.3% to 191.2 rupees after the results.

($1 = 83.2575 Indian rupees)

 

(Reporting by Ashna Teresa Britto; Editing by Mrigank Dhaniwala)