Arvind's Q1 FY25 result: Net profit drops 40% due to elections, workers' strike in Gandhinagar
The company posted a 1% fall in revenue from operations while the revenue from its textile segment, which accounts for 73% of the total sales fell 5% from the previous year
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Fashion retailer Arvind Limited has reported a 40% drop in its net profit in the first quarter of the financial year (FY) 2025 as the inflationary pressure weighed on consumers' spending despite discounts.
The seller of international brands like Tommy Hilfiger and Calvin Klein saw a decline in net profit to Rs 393.1 million in Q1 FY2025 from Rs 658.7 million in the same period last year.
The company posted a 1% fall in revenue from operations while the revenue from its textile segment, which accounts for 73% of the total sales fell 5% from the previous year.
The company said that its financial performance and growth were affected due to two major events- the Lok Sabha polls and illegal workers' unrest.
Arvind Ltd was hit by a 21-day long labour strike in May this year at its Santej factory, Gandhinagar. The workers accused the company of labour law exploitation and demanded better wages.
The strike affected the company's main businesses, including the woven segment, and denim segment. According to the fashion retailer, the strike had an approximate impact of "Rs 200 crore on revenue and Rs 60 crore on EBITDA, including Rs 11 crore in increased costs such as air freight and additional worker costs to mitigate the strike".
Further, its expenses increased by 1% hurting its margins.
The overall revenue for the quarter stood at Rs 1,831 crore and EBITDA stood at Rs 150 crore. The textile division revenue stood at Rs 1,350 crore and the advance material division reported a revenue of Rs 329 crore in Q1 FY25.
The company has expected fabric volumes to return to normal levels for the remainder of the year. Arvind has also anticipated achieving a volume of nearly 10 million pieces per quarter in garmenting and attaining nearly 25% growth.
The share of Arvind Ltd dropped by 2.99% to Rs 374.60 on Monday at around 2:12 pm.
