Sharekhan has given Buy recommendation for Arvind with a target price of Rs. 122 in its research report issued on Aug 05, 2021

Sharekhan’s research report on Arvind

Q1FY2022 was affected by production shutdowns in factories in South India, delayed buying by domestic players and supply constraints in export markets. Revenues stood at Rs. 1,439.4 crore and OPM at 7.2%. Denim and woven fabric volumes recovered to 8-9 million metres in June. Company is confident of achieving volumes of 24 million metres for denim, 30 million metres for woven fabric and 9 million pieces for garments. Price hikes of 7-8% with a lag and better operating leverage would help OPM improve sequentially. However, better picture on margins would emerge in H2FY2022.

Outlook

With strong export demand and an expected recovery in domestic demand and good growth in technical textiles, Arvind eyes a bounce-back in the coming quarters. We maintain a Buy on the stock with a revised PT of Rs. 122.

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