11 January 2022

Company Update | Sector: Retail

Arvind Fashions
BSE SENSEX S&P CNX
60,617 18,056 CMP: INR285 Not Rated
Cleanup phase over; focus on profitable growth
Doing the right things
Stock Info
Bloomberg ARVINDFASN IN
Arvind Fashion has seen a tumultuous phase since its listing around three years
Equity Shares (m) 132.3 ago at ~INR460 and is now down 40%. The last two years have been particularly
M.Cap.(INRb)/(USDb) 37.7 /0.5 challenging due to COVID. This has triggered four rounds of equity raise,
Financials Snapshot (INR b) including the Flipkart backing, which has reduced its leverage. The business has
INRb FY19 FY20 FY21 become much leaner, in addition to the company’s decision to cast aside the
Sales 46.4 38.7 22.0 long tail of loss-making brands and sell the value retail chain “Unlimited.” We
EBITDA 2.9 -1.2 -0.1 see a change in the management philosophy from “chasing growth to “chasing
Adj. PAT 0.2 -6.9 -4.4 profitable growth.” It now focuses on six key brands (contributing ~70% to
EBITDA Margin (%) 6.2 -3.0 -0.3
revenue) – USPA, Arrow, Tommy Hilfiger, and Flying Machine among the power
brands and CK and Sephora under emerging brands (~10% revenue) – with a) a
Adj. EPS (INR) 3.7 -120.1 -76.9
revenue scale of INR30b in the pre-COVID base and the ability to do high-single-
EPS Gr. (%) 66.3 LP -36.0
digit to low-double-digit margins (pre-Ind-AS 116).
BV/Sh. (INR) 211.5 119.1 102.5
Ratios Focus on power brands to drive disciplined growth
Net D:E 0.6 1.7 1.5
The segment (which contributes ~70% to revenue) has seen steady recovery
with positive LTL growth in the last few months. Going forward, the focus would
RoE (%) 1.8 -72.7 -69.4
be on monetizing brand value through franchisee-led store expansions. The
RoCE (%) 12.1 -22.4 -11.7
Retail segment contributes 35–40% to revenue. It aims to add 150–200
Payout (%) 0.0 0.0 0.0
exclusive brand outlets (EBOs) each year through the Franchise Owned,
Valuations
Franchise Operated (FOFO) route. It plans to expand largely in power brands on
P/E (x) 76.6 -2.4 -3.7
the current base of 800–900 stores, implying 15–20% new store additions.
EV/EBITDA (x) 8.4 -24.3 NA Multi-brand outlets (MBOs), which contribute 10–15% to revenue, have seen
EV/Sales (x) 0.5 0.7 1.1 muted recovery from COVID. Also, the penetration of the online channel in tier
Div. Yield (%) 0.0 0.0 0.0 2/3 cities and elongated working capital have posed challenges. It further plans
FCF Yield (%) 0.9 3.0 -4.7 to add 5–10 Sephora stores every year, on the base of 24 stores, spending
about INR30–50m. The key focus is on a) expanding- into tier 2 towns by
reducing store size from 2–3k sq.ft to 1k sq.ft, b) initiating online and
marketplace models, and c) increasing the range of lower price point SKUs from
2.5k/product currently.
Can the online channel gain a bigger piece of the pie with the Flipkart
backing?
The last 2–3 years have seen a big push for Arvind Fashion’s online foray, similar
to most retailers. On the back of the COVID-led lockdowns, Arvind Fashion’s
online share increased from low double digit digits to 30% of revenue
(annualized revenue run-rate estimated at INR10b in 2QFY22). Earlier, only
merchandise from the old season was sold to online market players on an
outright basis. Now, even new season merchandise is well-received online.
Moreover, the tie-up with Flipkart is creating new opportunities. For instance,
online players are now ordering specific merchandise outright, piloting
promotional campaigns in select categories at sharper pricing to drive higher
volumes at limited fixed costs. This presents a huge opportunity to earn and
would potentially double revenue over the next 3–4 years. This could prove a
big opportunity for specific brands such as Flying Machine.
Aliasgar Shakir - Research Analyst (Aliasgar.Shakir@MotilalOswal.com)
Harsh Gokalgandhi - Research Analyst (Harsh.Gokalgandhi@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Arvind Fashions

Stable-state high-single-digit EBITDA margin to fuel strong earnings

It is presently operating at mid-single-digit margins, which should trend towards the
high single digits over the next 2–3 years. At a revenue scale of INR40–45b, it has
the potential to achieve INR4–4.5b in EBITDA, with high-single-digit EBITDA margins
on pre-Ind-AS 116 basis. Historically, power brands have achieved 12% margins;
however, a) the elimination of high-margin institutional and MBO revenue in Arrow
and b) 15–20% revenue in USPA coming for Innerwear and Footwear (which garner
lower profits as compared to adult and core line businesses) may curtail the margin
to the high single digits. Sephora has achieved breakeven, and recent initiatives
should improve margins, whereas CK is estimated to be at high single digit margins
(pre covid).

Leverage position and FCF generation are key priorities

The present net debt of INR4b may stabilize at INR5.5–6b with inventory stocking
and others factors. The management endeavors to improve inventory from 4x to 5x
over the next 2–3 years, which may be partly offset by working capital investment in
150–200 stores. Subsequently, FY23E onwards, it could potentially generate FCF.

Valuation – a blend of disciplined growth

The stock at INR276 has more than doubled in the last six months, but still trades at
just 1.1x on EV/sales v/s 2–3x for most apparel retailers. This may largely be
attributable to the concerns around profitable growth for Arvind Fashion. However,
this is now slowly changing on account of recent measures to pare loss-making
businesses as well as deleveraging initiatives that could potentially reflect in
reducing the valuation arbitrage v/s peers.

10 January 2022 2
 Arvind Fashions

Focus on key brands

 After the paring of loss-making brands across segments, the focus is now on six
key brands – USPA, Arrow, Tommy Hilfiger, and Flying Machine among the
power brands, and CK and Sephora under emerging brands.
 The steady-state pre-COVID revenue stands at ~INR30b, which stood partially
impacted at ~INR28b in FY20 (excluding Unlimited).
 Segment-wise, this implies power brands constitute INR24–25b of revenue and
emerging brands INR4–5b. It has pared off Unlimited (INR6–7b) and GAP
(INR2b), among other brands.

Revenue recovery seen on the back of festive demand

 Post the lifting of the lockdown, steady recovery is seen on the back of the
festive season, with the revenue run-rate reaching closer to pre-COVID levels.
 The Retail segment is likely to see growth, led by steady store adds, while the
MBO channel may see muted performance – as seen across most retailers given
the possibility of weak liquidity among the distributors in smaller tier cities.

Online business gaining significance

 Online share: The share of the online channel peaked to 60% during the COVID
period (40% in 2QFY22), this could stabilize at 30% of revenue presently. During
the pre-COVID period, this was in the low double digits.
 The online channel operates via two models – a) the third-party marketplace,
with leading platforms such as Flipkart, Amazon, Myntra, and AJio and b) its own
platform – NNNow.com. Of 30% of its own platform, 10–15% in the omni-
channel is shipped through the stores, while the rest is shipped through the
warehouse.
 Online gaining significance: Earlier, only old season merchandise was sold to
marketplace players on an outright basis. Now, new season merchandise is sold
on a consignment basis and online players are able to order even new specific
merchandise on an outright basis.
 To ensure the brand does not get dilutes, Arvind Fashion may create sub-
brands. For instance, Flying Machine has a value brand as well as a premium
sub-brand.
 The online gross margin may be lower v/s the Retail segment, but the EBITDA
margin has a similar trajectory given the relatively lower cost of retailing, which
gets nullified with regard to logistic and marketing costs.

Channel-wise revenue split

 Retail contributes 35–40% to its revenue of INR10–12b, while online stands at
40%, which should stabilize at 30% of revenue. The combined revenue of large-
format stores (LFS) and MBOs could be in the low double digits at 10–15%, i.e.,
INR3–5b.
 Brand-wise mix
 The Tommy Hilfiger (96 stores) business is largely driven by the Retail
segment.
 Arrow (267 stores) and USPA (376 stores) are evenly split across channels –
25% each.

10 January 2022 3
 Arvind Fashions

 Flying Machine (279 stores – 500 sq ft stores) has 50% coming from digital
given its JV with Flipkart, while for the remaining 50%, the contribution of
retail and distribution is higher, with the LFS mix being lower.
 CK (69 stores) and Sephora (24 stores of 2000–2500 sq ft), being premium
brands, are largely Retail-led businesses. The typical high-street format has a
higher store size, while stores at malls are relatively smaller in size at 1000–
1500sq ft.

Revenue outlook
 Overall with the online channel and Retail segment firing, it has the potential
to achieve revenue of INR45–50b over the next three years.
 It has the potential to add 150–200 EBOs each year, mainly in power brands, on
the current base of 800–900 stores, implying 15–20% new store additions. The
store additions may come largely through the franchise route (inventory on a
consignment basis, with a security deposit). The Company Owned, Company
Operated (COCO) model would be only for Sephora.
 LFS and MBO should see flat to single-digit growth. Although MBO gives a good
full-price sell-through, the elongated WC cycle in the past has been a concern.
The management focus is now on ensuring profitability and a lean balance sheet
instead of chasing growth, as seen in the past.
 Sephora operates 24 stores currently and has the capability to add 5–10 stores
every year, with capex of INR3–5m/store. Sephora has a healthy average order
value of INR3,000. There are three key focus points here: a) expanding in tier 2
cities by reducing the store size from 2,000–3,000 sq.ft to 1,000 sq.ft stores; b)
initiating the online and marketplace models to drive growth and scalability,
with better inventory utilization; and c) increasing the range of lower price point
SKUs from INR2,500 currently to below INR2,500 to expand the target market.
Currently, it sells 10k SKUs of the 25k SKUs provided by Sephora. However, it has
the potential to drive 20–25% growth by expanding the retail network. If the
growth opportunity from digital channel is considered, it could see much higher
growth.

EBITDA outlook
 On INR30b in revenue, stable-state margins could be 8% (pre-Ind AS 116). In
2QFY22, it has achieved a positive EBITDA margin, which should improve to the
high single digits over the next 2–3 years. Thus, it has the potential to achieve
INR4–4.5b in EBITDA on a revenue base of INR40–45b.
 Historically, power brands have achieved 12% margins. However:
 In the last few years, the high margin business from institutional and MBO
(nearly INR6b) in Arrow has been curtailed.
 In USPA, the INR1.50–2b Footwear and Innerwear businesses (15–20% of
USPA’s brand revenue of INR10b) are profitable. Footwear was started two
years ago (via online and Retail). Innerwear was started three years ago in
FY19 (predominantly via MBO and Retail). Growth for Innerwear would be
higher.
 Adjusted for these two factors, power brands would achieve 10–12%
margins. At an overall level, it should achieve high-single-digit to double-
digit margins, if we adjust for lower profits in Footwear and Innerwear.

10 January 2022 4
 Arvind Fashions

Focus on improving Balance sheet

 Net debt, which currently stands at ~INR4b, would stabilize at INR5.5–6b given
the expansion of stores, inventory stocking, and others.
 It plans to a) improve inventory days with the aim to improve inventory turns
from over 3x to 4x by FY22 and b) reach ~5x over the next 2–3 years by
increasingly focusing on the quality of the growth instead of earlier growth
coming from institutional and MBO channels.
 FY23 could see positive FCF on the back of improved operating margins.

Exhibit 1: Details of funds raised / investments made recently

Amount Raised Price (Discount)/
Period Type of Issue Prevailing CMP Equity dilution
(INR b) (INR) Premium
Jul'20 Right Issue 4.0 100.0 119.7 -16% 68%
Jul'20 Investment by Flipkart* 2.6 NA NA NA
Feb'21 Right Issue 2.0 135.0 157.4 -14% 15%
Sep'21 Preferential allotment 4.0 218.5 273.3 -20% 15-16%
*Investment by Flipkart was in Arvind Youth Brands (Subsidiary)
Source: MOFSL, Company

Exhibit 2: Details of brands discontinued / sold off

Period Brand Stores Revenue (INR b)
FY20 GANT 65
FY20 Nautica 97
FY20 Elle 20
Collective revenues of INR 2-3b
FY20 Izod 100
FY21 The Children’s Place NA
FY21 Hanes Brands NA
FY21 GAP 15-20 2
FY22 Unlimited 74 5.3
Source: MOFSL, Company
Exhibit 3: Segment-wise estimated revenue potential
(INR m) FY19 FY20 FY21 FY22P FY23P FY24P FY25P
Consolidated revenues 46,439 38,663 22,012 25,181 29,354 34,748 41,259
-17% -43% 14% 17% 18% 19%
Power 27,970 25,880 15,170 19,761 23,013 27,265 32,430
% of total 60% 67% 69% 78% 78% 78% 79%
Total stores 1,025 1,018 1,143 1,268 1,393 1,518
Per store 25 15 17 18 20 21
New stores added -7 125 125 125 125
Emerging Brands 5,480 4,990 2,220 5,420 6,341 7,483 8,830
12% 13% 10% 22% 22% 22% 21%
Total stores 95 93 118 143 168 193
Per store 53 24 46 44 45 46
Specialty retail 11,100 11,120 4,630 0 0 0 0
P-Potential numbers. Specialty retail discontinued from FY22. Source: MOFSL, Company

10 January 2022 5
 Arvind Fashions

Exhibit 4: Estimated revenue and EBITDA potential

(INR m) FY19 FY20 FY21 FY22E FY23E FY24E FY25E
Consolidated revenues 46,439 38,663 22,012 25,181 29,354 34,748 41,259
14% 17% 18% 19%
Retail 14,305 8,805 10,390 12,467 14,961 17,953
% of revenue 37 40 41% 42% 43% 44%
18% 20% 20% 20%
Online 11,599 6,604 7,594 9,113 11,391 14,239
% of revenue 30 30 30 31 33 35
% growth YoY 15% 20% 25% 25%
LFS/MBO 12,759 6,604 7,198 7,774 8,396 9,067
% of revenue 33 30 29% 26% 24% 22%
% growth YoY 9% 8% 8% 8%
EBITDA 1,510.89 2,348.32 3,474.77 4,538.52
Margins 6% 8% 10% 11%
P- Potential. Source: MOFSL, Company
Exhibit 5: Inventory days, levels, and turns
FY18 FY19 FY20 FY21
Turnover 42,189.0 46,438.6 38,662.5 22,011.8
Inventory 7,272.9 9,862.8 13,058.3 8,100.1
Inventory days 62.9 77.5 123.3 134.3
Inventory turns 5.8 4.7 3.0 2.7
No of stores 1,300.0 1,411.0 1,478.0 1,545.0
Inventory/store 5.6 7.0 8.8 5.2
Source: MOFSL, Company
Exhibit 6: Consolidated revenue trend (INR b) Exhibit 7: EBITDA trend (INR b)

Consol. revenues Growth YoY (%) Consol. EBITDA EBITDA margins

226.5
5.8 6.2 6.0
5.4

10.1
(16.7)
(51.7) (43.1) (0.3)
0.8 2.3 2.9 2.3
42.2 46.4 38.7 22.0
12.9
(0.1)
FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

Source: MOFSL, Company Source: MOFSL, Company

Exhibit 8: Segmental revenues impacted in FY21 (INR b) Exhibit 9: Segmental EBITDA trend (INR b)
Power Brands Emerging Brands Speciality Power Brands Emerging Brands Speciality
28.0 3.4
25.9
23.1 2.8
20.0 2.2
1.8
15.2 1.1
11.1 11.1 0.4
8.1 9.5 (0.5) (0.2) (0.4) (0.5)
7.0 5.5
5.3 5.0 4.6
2.2 (0.3) (0.1) (0.4) (0.3)
(0.9)
FY17

FY18

FY19

FY20

FY21

FY17

FY18

FY19

FY20

FY21

Source: MOFSL, Company Source: MOFSL, Company

10 January 2022 6
 Arvind Fashions

Exhibit 10: Consolidated revenue at 73% of pre-COVID levels Exhibit 11: EBITDA turns positive in 2QFY22

Revenues (INR b) QoQ Growth (%) EBITDA (INR b) EBITDA margins (%)
12.6

6.6 6.6 7.3 2.2 10.0 9.6 (1.4) 8.2 9.3

12.1

6.9
11.7

11.4
319.8
11.2

8.1
(10.4) (14.4)

9.0
9.0

154.4

7.7
1.0
(114.7)
7.1

0.8
0.8
0.9
0.2
1.1
1.1

0.7
0.7

0.6
20.1 4.1 (7.2) 24.2 1.4 (14.7)

4.4
(22.9) (37.4) 106.4

3.2

(0.1)

2QFY21 (1.2)(0.5)

(0.5)
(85.4) (58.5)
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22

2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21

3QFY21
4QFY21
1QFY22
2QFY22
Source: MOFSL, Company Source: MOFSL, Company

Exhibit 13: Power brands’ margins now settling at higher

Exhibit 12: Power brands see strong recovery in 2QFY22 single digits
Revenues (INR b) QoQ Growth (%) EBITDA (INR b) EBITDA margins (%)
7.2 7.5 7.3 420.8 15.4
6.8 6.6 6.8 6.4 6.7 12.0 11.2 11.5 11.8
5.9 6.3 9.9 15.0 9.9
5.5 2.6 (2.2) (4.6)
5.2
0.5 157.3
131.5
41.7 (0.4)
4.9 6.3 3.2 (10.8) 4.0 2.8 (13.5) 0.8 0.8 0.9 0.6 0.4 0.4 1.1 0.6 0.8 0.7
(30.6) (52.6)
(0.1) (0.1)
(92.2)
(66.0)
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22

Source: MOFSL, Company Source: MOFSL, Company

Exhibit 14: Stores seeing strong recovery v/s pre-COVID levels

Source: MOFSL, Company

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 Arvind Fashions

Exhibit 15: Online continues to grow

Source: MOFSL, Company

10 January 2022 8
 Arvind Fashions

Financials and valuations

Income Statement (INR m)
Y/E March FY17 FY18 FY19 FY20 FY21
Total Income from Operations 12,922 42,189 46,439 38,663 22,012
Change (%) -51.7 226.5 10.1 -17 -43
Raw Materials 6,959 19,789 22,887 21315 12870
46 53 51 45
Employees Cost 1,116 3,669 4,078 3492 2291
Rent 0 0 0 0 0
Other Expenses 4,097 16,437 16,593 11545 6921
Total Expenditure 12,171 39,895 43,557 36,352 22,082
% of Sales 94.2 94.6 93.8 94.0 100.3
EBITDA 751 2,294 2,881 -1,170 -70
Margin (%) 5.8 5.4 6.2 -3.0 -0.3
Depreciation 430 1,390 1,532 4375 3027
EBIT 322 905 1,350 -5,545 -3,097
Int. and Finance Charges 326 913 1,262 2891 2249
Other Income 24 125 41 598 1283
PBT bef. EO Exp. 19 116 129 -7,839 -4,063
EO Items 0 0 0 -607 -452
PBT after EO Exp. 19 116 129 -8,446 -4,515
Total Tax -162 -14 -86 -977 419
Tax Rate (%) -837.0 -11.7 -66.7 11.6 -9.3
Reported PAT 182 129 215 -7,469 -4,933
Adjusted PAT 182 129 215 -6,932 -4,439
Change (%) -146.6 -28.9 66.3 -3,325.7 -36.0
Margin (%) 1.4 0.3 0.5 -17.9 -20.2

Balance Sheet (INR m)

Y/E March FY17 FY18 FY19 FY20 FY21
Equity Share Capital 217 232 232 235 424
Share Premium 6,363 11,571 11,571 0 0
Non-Controlling Interest 0 873 912 889 694
Total Reserves 0 -1,205 -509 5750 4796
Net Worth 6,580 11,471 12,206 6,874 5,914
Total Loans 5,767 6,709 7,908 12104 9034
Net Deferred Tax Liabilities -2,115 -2,362 -2,692 -4401 -3918
Capital Employed 10,233 15,817 17,422 14,577 11,030
Gross Block
Less: Accum. Deprn.
Net Fixed Assets 3,405 5,326 5,489 12,356 10,453
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv. 16,115 23,499 26,393 18,657 14,010
Inventory 9,436 7,273 9,863 13,058 8,100
Account Receivables 2,501 7,845 8,787 7,814 6,256
Cash and Bank Balance 231 284 121 116 189
Loans and Advances 3,948 8,097 7,623 -2,331 -535
Curr. Liability & Prov. 9,286 13,008 14,460 16,436 13,433
Account Payables 7,478 10,680 12,390 1,773 9,318
Other Current Liabilities 1,688 2,142 1,857 14,467 3,927
Provisions 121 186 214 197 188
Net Current Assets 6,829 10,491 11,933 2,221 577
Misc Expenditure
Appl. of Funds 10,233 15,817 17,422 14,577 11,030

10 January 2022 9
 Arvind Fashions

Financials and valuations

Ratios
Y/E March FY17 FY18 FY19 FY20 FY21
Basic (INR)
EPS 3.3 2.4 4.0 -127.5 -81.7
Cash EPS 11.2 27.9 32.1 -47.0 -26.0
BV/Share 121.1 211.0 224.6 126.5 108.8
DPS 0.0 0.0 0.0 0.0 0.0
Payout (%) 0.0 0.0 0.0 0.0 0.0
Valuation (x)
P/E 85.3 120.0 72.2 -2.2 -3.5
Cash P/E 25.4 10.2 8.9 -6.1 -11.0
P/BV 2.4 1.4 1.3 2.3 2.6
EV/Sales 1.6 0.5 0.5 0.7 1.8
EV/EBITDA 28.0 10.0 8.4 -24.6 -559.6
Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0
FCF per share -16.7 -42.8 3.7 14.6 -11.1
Return Ratios (%)
RoE 3.6 1.4 1.8 -72.7 -69.4
RoCE 26.7 7.5 12.1 -22.4 -11.7
RoIC 30.3 8.2 14.5 -32.7 -28.5
Working Capital Ratios
Fixed Asset Turnover (x) NA NA NA NA NA
Asset Turnover (x) 1.3 2.7 2.7 2.7 2.0
Inventory (Days) 267 63 78 123 134
Debtor (Days) 71 68 69 74 104
Creditor (Days) 211 92 97 17 155
Leverage Ratio (x)
Current Ratio 1.7 1.8 1.8 1.1 1.0
Interest Cover Ratio 1.0 1.0 1.1 -1.9 -1.4
Net Debt/Equity 0.8 0.6 0.6 1.7 1.5

Cash Flow Statement (INR m)

Y/E March FY17 FY18 FY19 FY20 FY21
OP/(Loss) before Tax 19 116 129 -4,964 -5,541
Depreciation 430 1,390 1,532 4,375 3,341
Interest & Finance Charges 320 880 1,240 2,865 2,333
Direct Taxes Paid -40 -254 -369 -112 112
(Inc)/Dec in WC -2,195 -3,064 -857 329 1,003
CF from Operations -1,465 -933 1,675 2,493 1,247
Others 9 155 76 -436 -2,019
CF from Operating incl EO -1,456 -778 1,751 2,057 -772
(Inc)/Dec in FA -548 -1,701 -1,534 -1,201 -409
Free Cash Flow -908 -2,479 217 857 -1,181
(Pur)/Sale of Investments
Others -6,549 211 35 24 14
CF from Investments -7,098 -1,490 -1,499 -1,177 -395
Issue of Shares
Inc/(Dec) in Debt -61 138 619 4,197 -3,008
Interest Paid -194 -876 -1,198 -5,144 -2,492
Dividend Paid
Others 8,803 3,000 119 93 6,610
CF from Fin. Activity 8,548 2,262 -459 -854 1,110
Inc/Dec of Cash -6 -6 -208 27 -57
Opening Balance 0 64 99 72 99
Closing Balance 64 99 72 99 43
Other balances 168 185 48 17 146

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 Arvind Fashions

Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >=15%
SELL < - 10%
NEUTRAL < - 10 % to 15%
UNDER REVIEW Rating may undergo a change
NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products. Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at www.nseindia.com, www.bseindia.com. Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company

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 Arvind Fashions

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The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information. The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.

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