Categories Concall Highlights, Consumer, Earnings

Arvind Fashions Ltd Q2 FY23 Earnings Conference Call Insights

Key highlights from Arvind Fashions Ltd (ARVINDFASN) Q2 FY23 Earnings Concall

Q&A Highlights:

  • [00:10:38] Sagar Parekh from OneUp Financial asked about the sequential GM reduction if it’s purely due to EOSS coming into July. Shailesh Chaturvedi MD replied that the EOSS discounting is a reality, and the company don’t really compare sequential EBITDA margin. But Q2 operating EBITDA was higher than Q1 EBITDA.
  • [00:14:58] Sagar Parekh from OneUp Financial enquired about margins pre-IndAS in FY24. Shailesh Chaturvedi MD said the company is very close to the trajectory of double digit EBITDA in power brands. And the guidance on the top-line growth is closer to 15% due to a strong growth momentum in brands.
  • [00:24:15] Kunal from Alpha Invesco asked about Arrow brand progress, looking at store declines and pre and post- IndAS EBITDA margin of Arrow. Shailesh Chaturvedi MD said Arrow has been big focus for ARVINDFASN in the last 2 years. And added that Arrow is one of the fastest-growing in the company’s portfolio.
  • [00:27:04] Kunal from Alpha Invesco enquired about the sale of adjacents as a percentage of overall US Polo sale. Shailesh Chaturvedi MD said adjacent category this season will be north of INR300 crores of NSV of adjacent category. ARVINDFASN expects this number to touch INR500 crore NSV mark in next 2- years.
  • [00:30:03] Kunal from Alpha Invesco asked about a ballpark number of stock turns in the foorwear segment. Shailesh Chaturvedi MD answered that as a company it’s at 4.2 turns and footwear enjoys a slightly higher turn than that. It should be crossing 5 kind of turn already.
  • [00:30:51] Naysar Parikh of Native Capital enquired about the channel mix, especially the MBO channel that had problems in the past. Shailesh Chaturvedi MD answered that across channels the brands have done well. The largest channel retail is around 40% at an annualized basis. Online was at 26% in 2Q23. Trade channel, MBO, is around 15%.
  • [00:32:54] Naysar Parikh of Native Capital also asked about any plans the company has to launch or acquire any kind of online first brands. Shailesh Chaturvedi MD said ARVINDFASN is very focused on its existing brands and see huge opportunity to grow in these brands in next many years. So currently there is no plan for any launch or acquisition.
  • [00:37:40] Yash Mandawewala with Mandawewala Family Office asked about the festive season sales trend. Shailesh Chaturvedi MD answered that the fall holiday season is going as per plan. There is a bounce back in the market and sell-throughs are as per the company’s plan.
  • [00:38:37] Rishikesh Oja from RoboCapital enquired about the outlook on debt. Shailesh Chaturvedi MD said the company’s debt level will be similar to levels of last year and expects till year end debt to be similar to last year March level.
  • [00:43:37] Dhruv Shah from Ambika Fincap asked about the southern market going forward and store size in Tier 2 Tier 3  cities. Shailesh Chaturvedi MD replied that US Polo is strong in south also now. On store size, the company said it will be similar to the current store size or smaller version of the current.

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