Arvind in restructuring drive - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Arvind in restructuring drive

Sep 3, 1999

India's leading denim producer, Arvind Mills is spinning off its garments and telecom businesses into two subsidiaries, in an effort to restructure its current business portfolio. The move is aimed at lending a sharper focus to these businesses by segregating them from Arvind's cotton textile business. Arvind Mills is also planning to decommoditise its cotton textiles business by implementing product differentiation strategies and value-added services like apparel-garment packages for global brands. The garments division of the company currently markets products under brands like Arrow, Lee, Newport, Flying Machine and Excalibur. Its branded garment business accounted for 6% of FY99 turnover. The telecom division of the company manufactures and markets small EPABX machines under the Syntel brand name. It also provides mobile radio trunking services in certain service areas under the brand name Omnitalk.

The move to spin off these divisions is an attempt by Arvind Mills to bring about a sharper focus to these businesses and improve margins. The management is already looking at private equity funds or strategic investors to off load up to 49% stake in its telecom and garments subsidiaries. Analysts expect that the divestment could fetch Arvind between Rs 1 bn to Rs 1.5 bn. This will help it tide over a liquidity crunch on account of a downturn in its key denim business and start-up pressures in its newly commissioned textile complex at Santej near Ahmedabad.

Market view:
Analysts have rated the stock as a 'SELL' in view of the over capacity in the company's principal denim segment and general down turn in the textiles industry. However, some analysts are beginning to review their ratings in view of the management's recent restructuring moves and efforts to shift from commodity to branded garments category.

Equitymaster requests your view! Post a comment on "Arvind in restructuring drive". Click here!


More Views on News

ARVIND Announces Quarterly Results (2QFY20); Net Profit Down 10.9% (Quarterly Result Update)

Oct 29, 2019 | Updated on Oct 29, 2019

For the quarter ended September 2019, ARVIND has posted a net profit of Rs 498 m (down 10.9% YoY). Sales on the other hand came in at Rs 20 bn (up 9.4% YoY). Read on for a complete analysis of ARVIND's quarterly results.

ARVIND Announces Quarterly Results (1QFY20); Net Profit Down 62.7% (Quarterly Result Update)

Aug 7, 2019 | Updated on Aug 7, 2019

For the quarter ended June 2019, ARVIND has posted a net profit of Rs 239 m (down 62.7% YoY). Sales on the other hand came in at Rs 19 bn (down 33.7% YoY). Read on for a complete analysis of ARVIND's quarterly results.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

An India Revival Stock I'm Bullish On... (Profit Hunter)

Apr 9, 2021

This could take India to the position of 3rd largest economy.

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

A Unique Sector for Short-Term Profits (Fast Profits Daily)

Apr 12, 2021

This ignored sector could deliver big short-term profits.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 16, 2021 (Close)