Arvind Ltd posts 70% profit jump in Q2 FY25-26 amid global trade challenges

Arvind Limited has reported a significant 70 percent year-on-year increase in its profit after tax, reaching ₹107 crore for the second quarter of the financial year 2025-26. This robust growth was partly attributed to a higher provision for deferred tax amounting to ₹29 crore during the period. The company's revenues from operations also saw a healthy rise of 8.4 percent, totaling ₹2,371 crore, boosted by a 10 percent revenue growth in textiles and a 15 percent increase in revenues from advanced materials.

Arvind Limited is actively implementing a multi-pronged strategy to navigate global trade complexities, including US tariff challenges. These strategies involve realigning its supply chain, expanding its market reach beyond the US, optimizing operational costs, and strengthening customer relationships to maintain competitiveness.

Operational highlights include a 16 percent volume growth in denim fabric to 15.2 million meters, supported by increased verticalisation and stable realisations. The woven fabric division achieved a volume of 35.1 million meters with 100 percent capacity utilization, while the garmenting division delivered a record 10.7 million pieces, marking a 17 percent year-on-year increase. Looking ahead, the company anticipates continued global trade uncertainty, particularly for US-linked supply chains, with an estimated quarterly EBITDA impact of ₹25–30 crore from US tariffs.

**Impact** This news indicates Arvind Limited's resilience and operational strength amidst global economic headwinds. The strong profit and revenue growth, coupled with strategic market diversification and cost optimization efforts, are positive indicators for investors. While US tariffs pose a challenge, the company's proactive approach and performance in key segments suggest its ability to adapt. Investors should monitor the successful execution of these strategies. Rating: 6/10

**Difficult Terms** * `Profit after tax (PAT)`: The net income remaining for a company after all expenses, interest, and taxes have been deducted. * `Year-on-year (y-o-y)`: A method of comparing financial data over a specific period (like a quarter or year) to the same period in the previous year. * `Deferred tax`: A tax liability or asset that arises from temporary differences between the accounting and tax treatment of items. In this context, it refers to tax effects that are recognized in financial statements but whose payment or refund occurs in future periods. * `Revenues from operations`: The total income a company generates from its primary business activities, excluding non-operating income. * `Advanced Materials`: Specialized substances or compounds engineered to exhibit superior performance characteristics for demanding applications. * `Multi-pronged strategy`: A comprehensive approach utilizing several different methods or tactics to achieve a particular objective. * `Tariff regime`: The set of rules and taxes imposed by a government on imported goods. * `Denim fabric`: A strong cotton warp-faced textile, typically blue, used for clothing like jeans. * `Verticalisation`: The process where a company takes control over multiple stages of its production or distribution chain, from raw materials to the final product. * `Realizations`: The average selling price or amount received for goods or services sold. * `Woven fabric`: A textile made by interlacing threads on a loom, creating a strong, stable material. * `Capacity utilization`: The ratio of a company's actual output to its potential maximum output over a given period. * `Garmenting division`: The section of a textile company responsible for manufacturing finished clothing items. * `EBITDA`: An acronym for Earnings Before Interest, Taxes, Depreciation, and Amortization, used as a measure of a company's operating performance.