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The thriving domestic market, with its shopaholic consumers, turned into a key growth segment for textile major Arvind. In FY-11, its retail and brand revenue jumped 47 per cent, accounting for a third of sales, up from the 28 per cent in FY-10.
Arvind benefited from the strong brands in its portfolio, both owned and licensed such as Excalibur, Ruf & Tuf, Lee and Wrangler. Its two flagship brands — US Polo and Arrow — did especially well.
With export markets too picking up in 2010, the gloom hanging over textile sector lightened up. The company's real estate forays to monetise its land holdings also propped up earnings. With plans on to further develop land, inflows from real estate could rise.
After a miserable year of cost pressures and losses in FY-09, Arvind had clawed its way back into profits in FY-10. The company regained a firm footing in FY-11, by stepping up focus on retail and brands, and reducing reliance on exports. Consolidated revenues grew a healthy 25 per cent in FY-11 while net profits more than tripled. The stock mirrored this healthy growth, hitting its 52-week high in late July.
Another factor which gave a helping hand to boost profits was Arvind's realigning its debt in FY-10. The company's consolidated debt:equity dropped to 1.3 times in FY-11 against the 2.1 times in FY-09.
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