loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Arvind Fashion Q4FY26 (consolidated) performance – Premiumisation led growth delivers

ICICIdirect Research 15 May 2026 DISCLAIMER

About the company: Arvind Fashions Ltd. (AFL) is a multi-brand apparel company operates through 1025 retail outlets (~1.3mn sq.ft). The company operates high value global brands such as US Polo, Tommy Hilfiger, Arrow and Calvin Klein under license agreement while it has its own in-house leading denim brand Flying Machine.
Redefined its business strategy to drive consistent growth: AFL transformed its business into profitable and efficient business model by rationalising its product portfolio to 5 marque brands, increased focus on scaling up direct-to-consumer sales and strengthening balance sheet by better working capital management and reduction in debt through improved cash flows in last five years.


Change in strategy driving desire results

  • The company delivered high single to low double digit Like-for-like growth for last six quarters.
  • High margin D2C business (Retail + Online B2C) contribution increased from 50% in FY24 to 56% in FY26.
  • Adjacent categories (including footwear, women wear) are growing by 20-25% under the US Polo and Tommy Hilfiger brand.
  • EBIDTA margins improved by ~300bps to 13.4% between FY24-26.
  • Working capital days remained stable at 52-53 days with inventory turns stable at 3.8x in FY26.

Q4FY26 performance is result of prudent strategy
Arvind Fashion Ltd (AFL) registered yet another quarter of strong performance in Q4FY26. Its consolidated revenues grew by 14.8% YoY to Rs.1364.8cr in Q4FY26. Mid-teen revenue growth was driven by 15% growth in retail business (LTL growth of 7.8%) and 46% growth in the online business B2C business.
Gross margins improved marginally by 19bps YoY to 54.1%. This along with better channel mix led to 51bps expansion in the EBIDTA margins to 13.9%. Consolidated EBIDTA grew by 19.2% YoY to Rs189.2cr. PAT from continuing operations grew by 56% YoY to Rs42cr vs. Rs25cr in Q4FY25.
Steady outlook for FY27: Management has maintained its guidance of 12-15% revenue growth, which will be driven by high single digit like-for-like growth and sustained retail space expansion. The company added 48 stores to 1025 stores in FY26 with store space of 11.94 lakh sq.ft. It expects to add another 1.4-1.5lakh sq.ft in FY27. Major brands such US Polo and Tommy Hilfiger is expected to grow in mid-teens growth. EBIDTA margins to improve by 30-40bps YoY in FY27 despite global uncertainties.

View: AFL continues to trade at discounted valuation of 9x and 7x its FY27E and FY28E EV/EBIDTA. We recommend Buy on the stock with a price target of Rs595.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere