Arvind Fashions Q2 FY27 Profit Climbs 29.6% to Rs 49 Crore

Revenue grew 10% YoY to Rs 1,559 crore, while EBITDA margin improved to 53.9%.

Reader Takeaway: Strong direct-to-consumer sales drive profit growth, though rising inventory days warrant close monitoring by shareholders.

What just happened

Arvind Fashions reported a robust second quarter for FY27. The company saw its consolidated revenue grow to Rs 1,559 crore from Rs 1,418 crore in the same period last year. Profits after tax (PAT) from continuing operations saw a significant jump of 29.6%, reaching Rs 49 crore. The company’s EBITDA rose 15.5% to Rs 216 crore, supported by a 136 bps expansion in gross margins.

Why this matters

The shift toward direct-to-consumer (DTC) channels is yielding results, with this segment now accounting for 53% of total revenue. Management noted a 7.3% growth in like-to-like retail sales and a 28% surge in online B2C business, indicating successful brand positioning and reduced reliance on discounting models.

Strategic Developments

The Board has approved the 'AFL PSU Scheme – 2026' to incentivize employees through performance-linked stock units. Additionally, the company is acquiring a 25% stake in Arvind Global Capability Center Private Limited, a move aimed at enhancing internal operational capabilities and efficiency.

Risks to watch

Inventory days rose to 108 days from 96 days in the year-ago period. While management attributed this to the expansion of direct channels, stakeholders should watch for impacts on working capital. Macroeconomic headwinds, including inflation and interest rate fluctuations, remain external risks cited by the leadership.

What to track next

Investors should look for updates on the implementation of the new stock unit scheme and how the Global Capability Center integration impacts long-term operating margins and cost structures.