Arvind Fashions reported a strong second-quarter performance. The stock in the month of November is up almost 12 percent. The year-on-year (YoY) revenues in Q2 were up 113 percent at Rs 812 crore versus Rs 382 crore and the loss was down to Rs 98 crore versus Rs 212 crore.

Kulin Lalbhai, Director, Arvind Fashions said the good news for the company is that the business is now fully recovered to pre-COVID levels. In Q2, the power brands saw 140 percent growth on a low base. In August September itself, we are back to pre-COVID levels and from the Diwali season onwards, we are seeing healthy growth as consumers are back into the offline channel as well, along with the online channel, which is continuing to grow.

He said although they do not give revenue guidance they do expect a full recovery. The Diwali season, comparable to pre-COVID saw a high-teen, like for like growth that they had not seen for a very long time. This shows that the consumers are actually back in the market and all the hard work done on improving efficiencies and improving the freshness of merchandise has started to kick in. So there would be a good scale starting to come in from quarter three, he added.

He further said, “Whilst we do expect the revenues to come back, the bigger focus of the company is how we really dramatically improve the bottom line of the company. Actually, we achieved a cash profit in quarter two and we expect that in the second half of the year, we should also achieve a positive PBT. So, the focus is not just to drive top-line, yeah, but to drive the bottom line and also constantly improve the cashflows by improving the working capital.”

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On debt, he said, “We expect the net debt to be somewhere around Rs 600 crores when we exit the year, which is a very healthy number.”

Talking about emerging brands, he said Q2 had an impact of July where the markets were not fully open but going forward they see an improvement in emerging brands, and power brands specifically is where a large part of the traction will come-in in the second half of the year, he said.

For the full discussion, watch the accompanying video