Arvind Ltd posted a 44% profit jump to ₹148 crore for Q2 FY27, driven by strong growth in its Advanced Materials segment. Despite the revenue boost, the core textile business faced margin pressure from volatile input costs. Investors are monitoring the impact of new capacity in Varanasi and global expansion on future profitability.
Arvind Ltd reported a revenue of ₹2,919 crore for the second quarter of the current financial year, with profit rising 44% year-on-year to ₹148 crore. This performance highlights a clear shift in the company’s business mix, as the Advanced Materials division continues to take on a larger role in driving growth.
The Advanced Materials segment was the primary driver of performance, recording an 80% increase in revenue to reach ₹805 crore. This growth is supported by demand in infrastructure, industrial expansion, and mobility-related projects. In contrast, the traditional textiles segment, which includes denim and garment manufacturing, grew by 19% to reach ₹2,146 crore. While the textile business saw improved volumes, it also faced significant challenges.
The bottom line was supported by a one-time net exceptional gain of ₹28.24 crore. This gain resulted from a favourable resolution of a land dispute dating back to the 2014-15 financial year. Municipal authorities withdrew a request to surrender land, allowing the company to reverse an impairment provision and unlock value. Investors should note that this gain is non-recurring and helped boost the net profit figure for the quarter.
Despite the revenue growth, profitability in the textile division remained under pressure. Volatility in raw material prices, such as cotton and yarn, along with elevated freight and utility costs, affected margins. The company noted that it could not fully pass these cost increases on to its clients, resulting in an estimated 75-basis-point negative impact on normalized textile margins.
To drive future growth, the company is focusing on operational expansion. A new greenfield garment facility in Varanasi has begun operations, with an annual revenue capacity of ₹250 crore. Additionally, the company has opened a design and marketing hub in Amsterdam to better serve its European clients.
Looking ahead, the management remains cautious. While domestic festive demand has supported sales, geopolitical friction and logistics challenges continue to weigh on the export market. The company projects early double-digit revenue growth for its textiles division in the second half of the year, provided that raw material costs stabilise. For investors, the key monitorables moving forward will be the company’s ability to stabilise margins, the ramp-up of the new Varanasi facility, and the management's success in navigating cautious global purchasing patterns.