CSEC Research: Arvind - Buy

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Arvind - Good Show, But Another Muted Quarter Ahead; Result Update Q3FY15 ::Edelweiss, report

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Sell Arvind between Rs.266.75 & Rs.272 :: HDFC Securities

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Arvind - Brand Story Intact; Fairly Valued; Result Update Q2FY15 :: Edelweiss report link

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Technicals - Cipla, Arvind, Hindalco, Karur Vysya Bank, IOC:: Business Line

Technicals- Cairn, GTL Infrastructure, Sterlite Industries, Reliance Infrastructure, Arvind, Crisil :: Business Line

 

Arvind, Buys India Businesses Of Two UK Retailers, Nautica Brand:: Nirmal bang,

Buys India Businesses Of Two UK Retailers, Nautica Brand

Arvind has acquired India businesses of British fashion retailers Debenhams and Next and also American brand Nautica from Planet Retail having FY12 revenue of Rs700mn for a total sum of ~Rs550mn, valuing the acquisitions at ~0.8x P/S. As per the management, these brands are making marginal profit at the store level, but losses at EBITDA/PAT levels due to corporate overheads. Due to the losses coupled with aggressive Rs1.5bn expansion, we believe the latest acquisitions would exert pressure on free cash flow and return ratios in the near term. Accordingly, we have increased our revenue estimates by 0.8%/1.7% but cut EBITDA and PAT estimates by 0.8%/3.5% and 10.9%/22.8% for FY13E/FY14E, respectively. We have rolled forward our valuation to FY14 estimates (from FY13) and factored in lower free cash flow/return ratios due to aggressive capex. We have retained our Buy rating on Arvind with a revised SOTP-based TP of Rs92 (from Rs97 earlier

Arvind- Inventory Write-down Lowers Margin : Nirmal Bang

Arvind -Target 145 :Anand Rathi

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Arvind                                                      CMP 83                                                              Target 145

Any change in the retail FDI policy by the government will be very positive for the company and may help to re-rate the company gradually and we may also re-rate the target on the higher side going forward.

Investment Rationale

~ The 'transformation' – change in business model –Focus shifts to BTC from BTB model

~ The USP – mega-mart retailing model

~ Capitalising on JV’s by also extending the product line - The JV – Arvind and PD Glass Composites

~ Monetization of land

~ Reducing foreign exchange risk

~ Aiming high… future plans

Arvind Ltd ::Back in Vogue: Nirmal Bang

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Back in Vogue
With a strong portfolio of 21 brands and aggressive 23.9% CAGR in retail
expansion at 1.58mn sq ft, we expect Arvind’s brands and retail business to
show 25.6% CAGR over FY11-14E at Rs19.1bn and increase its share from 22%
to 32.7% over the same period. Positive result of major capex of Rs4.3bn over
FY11-12 would be visible in FY13-14. Its stock is currently trading at 6.5x/4.9x
FY13/14E P/E and 5.2/4.2x EV/EBITDA, below the mean of 8.1x and 6.5x,
respectively. Strong 12.4% revenue CAGR aided by 104bps higher operating
margin, working capital efficiency and debt reduction by 26.5% should drive
profitability CAGR by 45.6% over FY11-14E, generate free cash flow of Rs5.2bn
over FY13-14E, improve adjusted RoCE by 303bps over FY11-14E and calls for
expansion of PE multiple. We assign a Buy rating to Arvind with a SOTP-based
TP of Rs117, valuing it at 9.1x/6.4x/1.2x PE, EV/EBITDA, P/B for FY13E.
Lower debt, interest rates to drive profitability: Bumper cotton production led to
softening of prices, which would reduce Arvind’s ex-cash working capital requirement
to 26.8% of sales in FY14E from 28.3% in FY11. Free cash flow of Rs5.2bn over
FY12-14E would reduce its debt by 26.5% to Rs16.2bn and its adjusted D/E ratio from
1.6x to 0.6x over FY11-14E. Lower debt, falling interest rates and improved credit
rating would prune interest costs from 6.4% to 3.3% of sales over FY11-14E and drive
net profit CAGR by 45.6% over the same period. Monetisation of real estate assets, as
and when it happens, would sweeten its cash flow and debt reduction programme.
Fast paced growth of B&R business: From a denim producer for corporate clients,
Arvind is turning into a brand power house catering to consumers directly. Aggressive
retail expansion, growth through multiple drivers like distribution expansion, new
brands launch and category expansion would drive the brands and retail (B&R)
division’s revenue CAGR by 25.6% to Rs19.1bn and increase its revenue share to
32.7% from 22% over FY11-14E. We expect its operating margin to rise by 140bps to
9.5%, which would increase segmental RoCE by ~109bps to 14.0% over FY11-14E.
Strong free cash flow and return ratios: With the decline in cotton prices and hence
working capital needs, a 104bps improvement in operating margin over FY11-14E and
lower capex, Arvind should generate positive free cash flow of Rs5.2bn over FY13-
14E. Following weak demand, we expect the performance of its textile and retail
divisions to remain muted in 1HFY13, thereby pruning consolidated margin by 20bps
to 14.2% and RoCE by 96bps in FY13E. However, with the revival in demand and soft
cotton prices, its revenue should grow 14.3%, operating margin should improve by
40bps and RoCE by 123bps in FY14E. Adjusted RoCE/RoE should improve from
11.7%/11.0% in FY11 to 14.8%/18.3%, respectively, in FY14E. Positive free cash flow
from FY13 onwards and improving return ratios should drive up the valuation multiple

Arvind Ltd ::Ambit India Access, December 2011

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Arvind Ltd
Arvind is the largest textile manufacturer in the country with presence
across denim, shirtings, voiles, khakis and knits. After incurring a loss in
FY09, it turned around in FY10 with a net profit of `530mn. In FY11 its
earnings tripled to `1.6bn on the back of strong growth in domestic sales
driven by rising consumer spending.
Company Background
Arvind, established in 1931 is the largest denim manufacturer in the country with
an installed capacity of ~108mn mtrs. It is a preferred supplier to internationally
renowned brands like Polo, Armani exchange, Diesel, GAP, Banana Republic, Zara
etc. Besides this it also has a strong brand portfolio comprising of licensed brands
like Lee, Wrangler, New Port, Arrow, Tommy Hilfiger etc. It also manufactures
shirtings, khakis and knits (with an installed capacity of 66mn mtrs) and knits (with
an installed capacity of 38mn mtrs).
Recent Financial Performance
Arvind posted a stellar performance in 2QFY12 with an earnings growth of 60%
on a YoY basis. This was driven by 23% growth in revenues (led by 21% and 6%
growth in denim and shirting/khaki fabrics respectively) and 174bps improvement
in margins (driven primarily by lower other expenses). The earnings growth of 60%
was despite Arvind booking a forex loss (mark to market loss on account of
revaluation of forex liabilities) of `189mn.
Outlook
Consumer’s rising focus towards premium brands augurs well for Arvind given its
strategy of focusing towards premium and luxury brand. Arvind is also planning to
introduce new brands (launching “ELLE” in FY12) and brand extensions (planning
to venture into technical textiles). Also it is planning to change its business model
from B2B to B2C. The share of B2C is likely to increase to 41% in FY2013E from
32% in FY2011 and 28% in FY2010. The stock is currently trading at 9x FY12
consensus eps. Compared to BRFL, the stock is trading at a discount of 25%, which
we think is unjustified despite higher RoE for FY12 (13% v/s 9% for BRFL) and
higher FY11-13 earnings CAGR (59% v/s 14% for BRFL).

Arvind : Sell :: Business Line

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

We recommend a sell in the stock of Arvind from a short-term perspective. It is evident from the charts of the stock that it had been on a medium-term uptrend from its August low of Rs 61.9 until it encountered resistance at around Rs 110 in late October. However, triggered by negative divergence displayed in daily relative strength index as well as moving average convergence divergence indicator coupled with key resistance levels at around Rs 110, the stock changed its direction downwards.

The stock started to decline and it tumbled 5.2 per cent each on November 9 and 14. Moreover, the stock has breached its medium-term uptrend line and key support level at Rs 100, confirming the trend reversal. Daily RSI has entered into the bearish zone from the neutral region and weekly RSI has entered into the neutral region from the bullish zone signalling downward momentum.

Daily price rate of change indicator is featuring in the negative territory, implying selling interest. We are bearish on the stock from a short-term perspective. We anticipate the stock's decline to prolong until it reaches our price target of Rs 94 or Rs 91 in the forthcoming trading sessions. Short-term traders can consider selling the stock while maintaining stop-loss at Rs 100.

Buy ARVIND:: IT'S NOT JUST ABOUT DENIMS ANYMORE….SPA

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Arvind Ltd. is the largest manufacturer, marketer and exporter of textile fabric and garments in the country. The
company has registered 230.1% growth in FY11 net profits, led by growth in domestic market on the back of strong
B2C business model. With the growth momentum carrying forward and improvement in margins, we expect the
company to show a faster growth in its top-line as well as bottom-line.
Growth Upswing Propelled by Strong Domestic Demand
The Indian domestic Textile and Apparel market size in 2009 was
US$ 47Bn and is expected to grow @ 11% CAGR to reach US$140Bn
by 2020. The company derived ~67% of its business from domestic
sales with 28% accounted by B2C and 72% by B2B model. Going
ahead the company is in process of increasing its B2C share to
41% by FY13E due to better pricing power compared to B2B
segment.
Advantage Brand 'Arvind'
Solid demand growth for apparel in the domestic segment has
correspondingly led to increased fabric demand. Strong distributor
network and an impressive bouquet of established brands
developed over the last couple of years has helped the company's
brand & retail business grow by 47% with the share of apparel &
fabric retailing growing to 32% in FY11 from 28% in FY10.
Improving ROCE by way of Land Monetizing
The company has around 520 acres of surplus land around
Gujarat which is expected to generate INR 10,000mn over the next
4 years. The amount will be used for capex funding and will help
improve ROCE from 10.7% to 15.8% over FY11-FY13E. Debt/EBITDA
multiple of 3.7x in FY11 is expected to improve to 2.1x by FY13E.
Shareholding (%)
Promoter 43.4
FII 10.3
DII 16.9
Others 29.3
Price Performance vs Sensex
Manas Majumdar
manas.majumdar@spagroupindia.com
Ph. No. 91 22 4289 5600 Ext.629
August 30, 2011 INITIATING COVERAGE
Expanding Product Line - Driving Growth Ahead
Arvind is planning to introduce new brands to occupy vacant segment
opportunities. The company is planning to launch Brand 'Elle' in
FY12 catering to the women's premium spaces as well as venturing
into technical textiles. Going ahead, the company expects this segment
to contribute INR 5,000mn by FY15E. Denim Fabric which constituted
around 46% of Textiles sales and 33% of overall revenue is expected
to come down below 30% on account of increased contribution by
other segments, mainly brands & retailing.
Capacity Expansion to Push Up Volumes
Current denim capacity of 108mn mtrs will be increased to
117.6mn mtrs by FY12 while additional 12mn mtrs capacity would
be added to the Woven division taking the total capacity to 84mn
mtrs by FY12. Aggressive capacity expansion across the segments
will result in volume expansion, thereby accelerating growth.
VALUATION AND RECOMMENDATION
We expect Arvind's topline and bottomline to grow at a CAGR of
20.5% & 66.8% respectively over the period FY11-13E coupled with
margin expansion, due to aggressive growth in existing businesses
and expansion in the high margin retail space and low gearing due
to land monetization. We recommend a buy on the stock with a
target of INR 108 implying a discount of 6x on FY13E earnings.

52-WEEK BLOCKBUSTER: ARVIND:: Business Line,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

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

Buy ARVIND LTD. target price is Rs 85 - 35% upside: Anand Rathi

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

ARVIND LTD.


Change in revenue mix like focusing on lifestyle brands and retail
format; has improved realizations which may prove beneficial for
the bottom line of the company going forward. Also the industry
growth and change in preferences for the consumers is also a
driving force for the company.

IFCI, Equity Buy/Sell, 24th Dec, 2010

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Equity Buy/Sell (Technical View)

Ø  We had mentioned pharma stocks on 14/12. Some of them have already  started moving up in an otherwise listless scenerio.

o   Glaxo was recommended  by us specifically on 10/12 near 2025. It touched 1998 on 13/12 and is now trading at 2185 and continues to look good.

o   Sun pharma was recommended Y'day and it has already started moving  up.

o   Arvind mill , Orchid, Polaris are the other scrips recommended by us  which have gone up. Arvind has strong resistance around 69. A convincing move beyond can take it up by another Rs10. 

Arvind Ltd -A long-term growth story – initiate with BUY:: Religare

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Arvind Ltd
A long-term growth story – initiate with BUY
We initiate coverage on Arvind (ARVND) with a BUY rating and a
December ’12 price target of Rs 96, an upside of 70% from current levels. We
are bullish on the Indian textiles space given the rapid shift from the
unorganised to the organised sector and the growing demand for branded
products. By virtue of its operational scale and early investments in brands,
Arvind is best positioned amongst peers to benefit from this structural shift in
the industry. The contribution of higher-margin and more capital-efficient
segments is increasing and we see return ratios settling at levels much higher
than those reported in the recent past.