(Reuters) – India’s Arvind Fashions, which retails clothing from premium brands such as Calvin Klein and Tommy Hilfiger, reported a 71% jump in third-quarter profit on Wednesday, on robust demand for high-end clothing in the festive period.
The company said its profit after tax from continuing operations rose to 280 million rupees ($3.20 million) in the quarter ended Dec. 31 from 160 million rupees a year ago.
Revenue from operations increased 6.9% to 12.03 billion rupees.
Shares of the company were up 3.39%.
KEY CONTEXT
Indians typically splurge on everything from clothing to appliances in the October-December period, which includes the Hindu festivals of Dussehra and Diwali, as well as Christmas and New Year’s Eve.
Timely winters and a strong wedding calendar also boost sales, the company said in a presentation to investors.
Arvind Fashions’ portfolio of brands, especially Tommy Hilfiger and Calvin Klein, targets the more affluent consumers, with prices well above mass-market brands such as Vero Moda and H&M.
As a result, its bottom line has been more resistant to inflation-led slowdown in demand. The company said it offered lower discounts on products in the third quarter.
PEER COMPARISON
Valuation (next Estimates (next Analysts’ sentiment
12 months) 12 months)
RIC PE EV/EBITDA Revenue Profit Mean # of Stock to Div yield
growth(% growth( rating* analys price (%)
) %) ts target**
Arvind Fashions 39.36 10.58 12.71 68.90 Strong 5 0.75 0.26
Buy
Trent 98.19 59.92 31.78 41.92 Buy 15 0.91 0.06
Shoppers Stop 91.34 10.89 15.80 254.10 Buy 5 0.79
Aditya Birla Fashion — 17.69 13.40 — Sell 17 0.95
and Retail
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
— All data from LSEG — $1 = 87.4175 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Savio D’Souza)
