Indian textile and apparel conglomerate Arvind Ltd’s de-mergerplan, which was announced a year back, has become effective from today (29th November). The group had announced to de-merge its branded apparel and engineering businesses into separate entities which would be listed in 2019. After the de-merger, Arvind Ltd. Now has the textiles business (fabric and apparel) and advanced material mainly.
“The textile business was overshadowed earlier because of the management’s focus on the fast-growing branded and retail segments but that is about to change. We expect revenue growth to be more than 12 per cent from FY19 to FY22,” a leading English daily quoted, Jayant Shah, CFO of Arvind Ltd. The textile business of the company reported a 6 per cent year-on-year revenue growth in the September quarter.
The main purpose of de-merger was to focus better on the core textiles business and the company is geared up for the same. Currently apparel business contributes nearly 20 per cent in the company’s revenue while the target is to double it up (40 per cent) in the next few years. Similarly, advanced material is expected to be doubled at 14 per cent which is at 7 per cent currently. It is focusing on capacity expansion with the investment of Rs 1,500 crore over the next three years, out of which Rs 500 crore would be incurred in FY19. It does have plans to convert a large chunk of its existing fabric business into garment orders. By doing this, the company will be able to get higher returns on invested capital.
