Arvind Ltd, known for its denim and apparel brands, plans to boost its advanced materials division through innovative textile applications in sectors such as defence, aerospace, and other infrastructure segments.
In FY24, all the units under the advanced material segment were consolidated into a separate entity, Advanced Material Ltd, to create greater focus and grow the business. “The move is aimed at helping us address growth imperatives in the segment, and take advantage of new opportunities, which will not only be capital-efficient but will ensure transparent reporting of progress,” Chairman Sanjay Lalbhai said in the company’s FY24 annual report.
“Our plans for the future include diversification of our product portfolio, addition of new capacities, exploring new geographies, and seeking out new customer segments for organic growth. At the same time, we are also looking forward to grow inorganically….,” he added. . Investment in its advanced material business is seen generating double-digit growth in the company’s topline.
In FY25, the company plans to spend around ₹400-500 crore, part of which will be used to add capacity in its advanced materials division, garments, and modernise its fabric base. Under the advanced material segment, it makes human protection fabric and garments, industrial products, advanced composites, and automotive fabrics.
Last fiscal year, Arvind Ltd reported a net profit of ₹336 crore on revenue of ₹7,738 crore. The bulk of its revenue came from the textile segment, which showed a fall, while the advanced materials segment, which contributed over 18 per cent to revenue, saw a growth of more than 14 per cent.
Capacities were augmented in the division, and new segments, such as defence, were added, opening engines for future growth. Human Protection revenues were driven by higher wallet shares in key accounts and increased traction in the Middle East, the company’s annual report said.
Outlook
The textile industry has been rather subdued and in FY24 company’s revenue from garmenting showed a fall due to lower demand for denim products and lower realisation.
“Despite near-term uncertainties, we remain optimistic about the medium term and intend to continue investing in our growth engines,” it said.
Demand in textiles segment will vary by market and while domestic markets are expected to improve, US volumes may see modest growth or remain flat, the company said. Demand from Europe and UK is expected to remain muted. “Things will change for better in case India is able to sign any free trade agreement with any of the key geographies.”
It expects the traditional textile business to grow at a more secular rate aligned to India’s GDP, while the AMD business is expected to grow at over 20 per cent annually.