Arvind Ltd. — Interim / Quarterly Report 2024

May 6, 2024

KRUNAL DEVENDRAKU MAR BHATT

Digitally signed by KRUNAL DEVENDRAKUMAR BHATT DN: c=IN, o=Personal, postalCode=380007, l=Ahmedabad, st=Gujarat, street=J-7 Komal Enclave Paldi, Ahmedabad City, Ahmadabad City Gujarat India- 380007- Near Shantivan Cross Roads, title=4605, 2.5.4.20=515d0c231360ca4e5fa6b703a29362a916f75296485bfd8f2fdc39683b5c5c0c, serialNumber=f1e7a9013d0c693b0ecfedd28c8f46434c88ce4b4dc213a883d1855d85ed0f83, email=krunal.bhatt@arvind.in, cn=KRUNAL DEVENDRAKUMAR BHATT Date: 2024.05.06 13:12:07 +05'30'

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Arvind Limited Q4 & FY24 Results

Investor Review Note

06[th ] May 2024| Ahmedabad

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Safe harbour statement

Certain statements contained in this document may be statements of future expectations and other forward looking statements that are based on management‘s current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. None of Arvind Limited or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its content or otherwise arising in connection with this document. This document does not constitute an offer or invitation to purchase or subscribe for any shares and neither it nor any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

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Q4/ FY24 reflections – hits & misses

What went right

• • Textiles demand bottomed out and reviving since Q3; orderbook for Q1/Q2 reflects resumed buying
• • Integration of Textiles businesses completed, visible improvements in operational efficiency
• • Garment volumes started increasing in Q4; healthy orderbook assures continuing momentum in Q1/Q2
• • AMD registered all round improvement in volume, revenue, margins and returns; capacity expansions went live and new segments (Defense business) opened engines for future growth
• • Softening of RM prices and lag in price adjustments gave one time bottom-line gains around Q2

What could have gone better

• ➢ Price deflation kept the revenue numbers muted across the board in H1

• ➢ Domestic retail businesses continued to remain under pressure

• ➢ Higher cotton inventory and increased domestic sales drove up Working Capital levels

• ➢ Industrial segment of AMD faced demand headwinds and deflation in raw material

• ➢ Demand for Woven & Garments remained muted in H1

• • Arvind’s sustainability credentials boosted through customer collaboration and launch of GIWICA CoE

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All round strong performance in Q4 FY24 – revenue growth, margin expansion, healthy returns and debt reduction

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YoY Sequential
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₹ Cr
Revenues
2075 10% 10%
EBITDA (Without other Income)
243 27% 12%
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PAT (Before exceptional items)
99 83 92
Closing Net Debt
1250 1333 (30 [th] Sep 2023)
1327 (31 [st] Mar 2023)
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YOY

• Top-line driven by volume growth

• Textile revenue up 5% due to higher volumes in Denims, Knits and Garments

• AMD grew by 21% backed by 17% volume growth

• EBITDA margins improved by 156 bps, driven by all round operational efficiency and operating leverage in AMD

• PAT grew by ~19% on account of higher margins

• Overall borrowing reduced by 6%

• Long-term debt reduced to ₹399 Cr, (₹652 Cr at the start of FY24, ₹480 Cr on Sep 30[th] 2023)

• Short Term borrowing increased due to working capital requirements

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On Full year basis FY24 delivered healthy performance, despite demand challenges in H1

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YoY
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₹ crs
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Revenues
7738 -8%
EBITDA (Without other Income)
845 6%
PAT (Before exceptional items)
334 349
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Closing Net Debt

• FY2024 started on a weak note given high customer inventories and uncertain demand

• Lower RM and input costs drove down prices which reduced revenues (despite healthy volumes)

• Textile revenues were lower by 14% on account of declined Fabric volumes

• AMD revenues grew by 14%, while volume growth stood at 18%

• Consolidated operating EBIDTA margins improved by 138bps

• Textile margins were higher by 126 bps driven by operational efficiency

• AMD margin improved to 15.6% as against 13.2% on account of lower RM prices and operating leverage

1250 1327 (31[th] Mar 2023)

• Overall debt reduced by ₹78 Cr during the year

• LT debt saw reduction of ₹253 Cr and stood at

  • ₹399 Cr at the year end

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Full year FY24 EBITDA margins improved; PAT reflects higher tax incidence

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All figures in INR Crs	FY24	FY23	YoY Change
Revenue from Operations EBIDTA (Continuing Operations)	7,738 845	8,382 800	-8% 6%
EBIDTA % Other Income Interest	10.9% 41 159	9.5% 45 164
Cash Accruals (Continuing Operations)	727	680	7%
Depreciation PBT Tax Minority Interest Share in Profit of JV	266 461 111 16 0	253 427 71 9 1	8%
PAT	334	349	-4%
PAT % Exceptional Item Profit from Discountinuing Operations	4.3% 2 0	4.2% 59 -4
Net Profit	337	405	-17%

o Tax rate for current FY - 24%

o There was a positive impact of tax in previous FY as we switched over to lower tax regime. (Rs. 39 cr). Ignoring that impact, tax rate for previous FY was 25.7%

FY24: Total Revenue and EBITDA includes ₹32 Cr and ₹6 Cr from sale of land (Forreste),

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Margins increase across both segments led to ~15% ROCE in Q4

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In Inr Cr Q4 FY24 Q4 FY23
Business Revenue EBIDTA EBIDTA % ROCE % Revenue EBIDTA EBIDTA % ROCE %
Textiles 1504 173 11.5% 15.0% 1431 135 9.5% 11.0%
Advanced Material 387 61 15.8% 32.0% 320 47 14.5% 28.9%
Others & Inter Segment 183 17 130 21
Total 2075 251 12.1% 14.8% 1881 203 10.8% 11.6%
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In Inr Cr	FY24		FY23
Business	Revenue EBIDTA EBIDTA % ROCE %		Revenue EBIDTA EBIDTA % ROCE %
Textiles Advanced Material Others & Inter Segment	5803 643 11.1% 13.6% 1428 222 15.6% 29.2% 507 20		6716 660 9.8% 15.1% 1250 165 13.2% 24.7% 416 20
Total	7738 886 11.4% 12.5%		8382 845 10.1% 12.3%

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Consolidated Balance sheet as on 31[st] Mar 2024

Particulars	**31st Mar 24 **	**30thSep 23 **	31st Mar 23
Shareholders' Fund Share Capital Reserves & Surplus Minority Interest Borrowings long Term Borrowings Short Term Borrowings Long Term Liability Maturing in one year Lease Liabilities (Current + Non Current) Other Liabilities	3621 262 3281 78 1325 263 926 136 123 2192	3426 262 3100 64 1420 279 940 201 124 2097	3404 262 3084 59 1404 378 751 274 114 1992
Total	7260	7067	6914
Assets Fixed Assets ROU Assets Non Current Investments Long term Loans & Advances Other Non Current Assets Cash and cash equivalents Other Current Assets	3788 3440 99 160 0 89 76 3397	3768 3395 101 183 1 89 88 3212	3797 3417 89 211 1 78 77 3040
Total	7260	7067	6914

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• Gross borrowings has decreased by ~ ₹78 Cr compared to March 2023.

• Long-term borrowings decreased by ₹253 crores during the year.

• Short-term borrowing increased due to working capital changes.

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All round improvement in FY24

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EPS Debt / Equity Debt / EBITDA
13.4 0.57 2.0
12.8
1.6
9.7 0.40 1.4
0.35
FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24
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ROCE
12.3% 12.5%
11.9%
FY22 FY23 FY24
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ROE
10.4%
9.4%
8.5%
FY22 FY23 FY24
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*EPS is before exceptional items

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Textiles

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Volumes improved across all segments in Q4

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32.9
Million M 31.6 31.7
28.6 29.4
11.2
11.7
Domestic 14.4 10.4 10.9
Exports 17.1 18.2 18.5 21.7 20.0
Q4 FY23 Q1 Q2 Q3 Q4 FY24
Million M 12.5 12.7 12.9
11.4
10.3
4.6
5.3 5.7
Domestic 5.0
4.7
8.3
Exports 6.5 7.2 7.0 5.5
Q4 FY23 Q1 Q2 Q3 Q4 FY24
Million Pcs 9.4
7.4 7.6 7.7
6.6
Q4 FY23 Q1 Q2 Q3 Q4 FY24
WOVENS
DENIM
GARMENTS
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Comparison for Q4 (YoY)

• Woven volumes are steady

• Denim Volumes recovered in Q4 while garments volume showed growth in Q4

• Current order book position continues to show healthy demand

• Export volumes includes sales made to export customers and shipments made to their garment factories in India

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Textile

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On a full year basis, Textile revenues de-grew in FY2024 due to raw material price deflation

Textile revenues (₹ Crs)

149 220 350 402 668 647 303 330 -39 Q4 FY23 -94 Q4 FY24 Denim Woven Garments Others Inter Segment 1,431 1,504 ~~+5%~~	969 849 1,695 1,595 2,792 2,518 1,586 1,257 6,716 5,803 ~~-14%~~
	-325 FY23 -416 FY24

Denim

• Volume improved in Q4 with steady realization

• Full year impacted by both volumes and pricing

Woven

• FY24 volume remain steady at 123 Mn mtrs

• Lower RM costs drove down price realization

Garments

• Volumes steadily improved over 4 quarters and jumped to 9.4M pcs in Q4

• FY24 volumes stood flat at ~32 M pcs

• Revenue growth impacted by change in customer and product mix

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Textile

Sales realisation is steady while Textile margin continue to improve

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Fabric realisation are steady…

… Textile margins continue to trend up

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₹/m
EBITDA Margins (%)
11.8
11.5
261 11.0
251 254 251 10.1
245 9.5
Denim
209
207
202
200
197
Wovens
Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24
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Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24

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Advanced Materials

AMD sustained growth | 21% for Q4 and 14% on full year basis

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AMD performance summary

Comments

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₹ Cr
+21% +14%
387 1,428
1,250
320
216 774
643
Human Protection 167
68 287
Industrials 75 317
103 366
Composites 78 290
Q4 FY23 Q4 FY24 FY23 FY24
EBITDA margins (%)
14.5% 15.8% 13.2% 15.6%
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• Q4 revenues were up 21% as impact of price adjustments tapered off; full year growth of 14% reflects lower input costs and prices earlier in the year

• Human Protection revenues driven by higher wallet shares in key accounts, increased traction in Middle East and healthy growth in Defense business

• Composites volumes jumped sharply driven by large global project orders

• Mass Transportation factory went live in Q4 FY24

• Industrials business had seen softer demand through Q3, now seeing bounceback

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Proposal to transfer AMD to Arvind Advanced Materials Limited (AAML), a 100% subsidiary of Arvind Limited

Rationale

Advanced Material business has tailwinds and is all set for growth with the base having been created

• This will require being ready for opportunities, both organic and inorganic

• Which will require capital as well as assimilating new businesses into our fold

Hence, we are creating this corporate structure to

• Create a focused entity housing the advanced material business

• Attract the right talent and align them to the prospects of this business

• Allow raising debt/equity as and when required

• Enable strategic partnerships / JVs

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Process, Consideration & Impact on Business

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Process

• The transfer AMD to AAML will be through NCLT scheme and be subject to approvals of regulatory authorities, creditors and shareholders. The process may take about 9 months.

• The Appointed Date for the transfer is April 1, 2024.

Consideration

The division will be transferred at a Consideration of INR 90 Crs.

Arvind Limited will receive cash and equity as consideration.

Impact on business and reported financials

There will be no impact on Business or Consolidated Financial results on account of this proposal

Capital Employed : AMD & AAML

Particulars	AMD Div Standalone	AAML Consolidated
Net Fixed Assets Net Current & Other Assets & Liabilities	352 213	438 212
Capital Employed	565	650

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Outlook for FY25 – uptick in revenue growth and margins

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Demand

With Inventory correction behind, and fresh order booking and onboarding of new customer, demand outlook is positive for FY25

Costs

Cotton and other input cost is expected to remain range bound

Revenue & Margin

• Overall revenues expected to clock double digit growth on full year basis powered by AMD and

• Garments

• EBITDA margins to be preserved, or show minor improvement

Capex, Debt & ROCE

• Stepping up capital expenditure to ~₹400- ₹450 Cr for new projects including AMD and Garmenting

• Long term Debt to remain at similar levels

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Thank You!