BSE:500101

Stock Analysis Report

Executive Summary

Arvind Limited, together with its subsidiaries, manufactures, supplies, and exports textiles worldwide.

Rewards

Trading at 29.7% below its fair value

Earnings are forecast to grow 30.77% per year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record



Snowflake Analysis

Very undervalued with moderate growth potential.


Similar Companies

Share Price & News

How has Arvind's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 500101 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.3%

500101

0.6%

IN Luxury

-1.1%

IN Market


1 Year Return

-51.6%

500101

11.9%

IN Luxury

7.3%

IN Market

Return vs Industry: 500101 underperformed the Indian Luxury industry which returned 8.4% over the past year.

Return vs Market: 500101 underperformed the Indian Market which returned 6.7% over the past year.


Shareholder returns

500101IndustryMarket
7 Day1.3%0.6%-1.1%
30 Day14.9%3.7%1.5%
90 Day-3.4%-1.1%5.1%
1 Year-50.0%-51.6%12.7%11.9%9.3%7.3%
3 Year-87.6%-88.2%54.0%52.1%28.9%22.0%
5 Year-82.8%-83.8%92.4%89.3%33.1%21.0%

Price Volatility Vs. Market

How volatile is Arvind's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arvind undervalued compared to its fair value and its price relative to the market?

28.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 500101 (₹43.5) is trading below our estimate of fair value (₹61.9)

Significantly Below Fair Value: 500101 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 500101 is good value based on its PE Ratio (6.4x) compared to the Luxury industry average (11.2x).

PE vs Market: 500101 is good value based on its PE Ratio (6.4x) compared to the Indian market (13.8x).


Price to Earnings Growth Ratio

PEG Ratio: 500101 is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: 500101 is good value based on its PB Ratio (0.4x) compared to the IN Luxury industry average (0.6x).


Next Steps

Future Growth

How is Arvind forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

30.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 500101's forecast earnings growth (30.8% per year) is above the savings rate (6.5%).

Earnings vs Market: 500101's earnings (30.8% per year) are forecast to grow faster than the Indian market (19.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 500101's revenue (8.5% per year) is forecast to grow slower than the Indian market (11.3% per year).

High Growth Revenue: 500101's revenue (8.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 500101's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Arvind performed over the past 5 years?

-9.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 500101 has high quality earnings.

Growing Profit Margin: 500101's current net profit margins (2.4%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: 500101's earnings have declined by -9.6% per year over the past 5 years.

Accelerating Growth: 500101's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 500101 had negative earnings growth (-44%) over the past year, making it difficult to compare to the Luxury industry average (1.2%).


Return on Equity

High ROE: 500101's Return on Equity (6.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Arvind's financial position?


Financial Position Analysis

Short Term Liabilities: 500101's short term assets (₹30.9B) do not cover its short term liabilities (₹32.9B).

Long Term Liabilities: 500101's short term assets (₹30.9B) exceed its long term liabilities (₹12.0B).


Debt to Equity History and Analysis

Debt Level: 500101's debt to equity ratio (86.4%) is considered high.

Reducing Debt: 500101's debt to equity ratio has reduced from 118.9% to 86.4% over the past 5 years.

Debt Coverage: 500101's debt is well covered by operating cash flow (101.5%).

Interest Coverage: 500101's interest payments on its debt are not well covered by EBIT (2.2x coverage).


Balance Sheet

Inventory Level: 500101 has a high level of physical assets or inventory.

Debt Coverage by Assets: 500101's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Arvind's current dividend yield, its reliability and sustainability?

4.54%

Current Dividend Yield


Dividend Yield vs Market

company4.5%marketbottom25%0.6%markettop25%2.3%industryaverage0.6%forecastin3Years5.9%

Current dividend yield vs market & industry

Notable Dividend: 500101's dividend (4.6%) is higher than the bottom 25% of dividend payers in the Indian market (0.56%).

High Dividend: 500101's dividend (4.6%) is in the top 25% of dividend payers in the Indian market (2.31%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 500101 has been paying a dividend for less than 10 years.

Growing Dividend: 500101's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.3%), 500101's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Arvind's salary, the management and board of directors tenure and is there insider trading?

7.5yrs

Average board tenure


CEO

Sanjaybhai Lalbhai (65yo)

0yrs

Tenure

₹62,560,573

Compensation

Mr. Sanjaybhai Shrenikbhai Lalbhai serves as Non Executive Chairman of The Anup Engineering Limited. Mr. Lalbhai has been an Executive Chairman of Arvind Limited since September 28, 2007 and serves as its  ...


CEO Compensation Analysis

Compensation vs Market: Sanjaybhai's total compensation ($USD882.83K) is above average for companies of similar size in the Indian market ($USD311.50K).

Compensation vs Earnings: Sanjaybhai's compensation has been consistent with company performance over the past year.


Board Age and Tenure

7.5yrs

Average Tenure

59yo

Average Age

Experienced Board: 500101's board of directors are considered experienced (7.5 years average tenure).


Insider Trading

Insider Buying: 500101 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy₹981,55431 Dec 19
Jagdish Dalal
EntityIndividual
Shares25,000
Max Price₹39.26
Buy₹57,753,91607 Dec 19
Aura Business Ventures Llp
EntityCompany
Shares1,500,000
Max Price₹39.19
Buy₹378,22407 Dec 19
Adhinami Investments Pvt Ltd
EntityCompany
Shares10,000
Max Price₹37.82
Buy₹5,893,17407 Dec 19
Akshita Holdings Pvt Ltd
EntityCompany
Shares149,864
Max Price₹39.32
Buy₹2,640,59304 Nov 19
Jayesh Shah
EntityIndividual
Role
Member of the Board of Directors
CFO & Whole Time Director
Shares52,111
Max Price₹50.83
Buy₹10,178,84431 Oct 19
Jayesh Shah
EntityIndividual
Role
Member of the Board of Directors
CFO & Whole Time Director
Shares200,000
Max Price₹51.45
Buy₹1,203,17101 Oct 19
Ashish Kumar
EntityIndividual
Shares25,000
Max Price₹48.13
Buy₹20,616,88011 Sep 19
Aura Business Ventures Llp
EntityCompany
Shares416,206
Max Price₹49.54
Buy₹105,745,23730 Aug 19
Aura Business Ventures Llp
EntityCompany
Shares2,200,000
Max Price₹48.53
Buy₹15,221,77130 Aug 19
Jayesh Shah
EntityIndividual
Role
Member of the Board of Directors
CFO & Whole Time Director
Shares315,000
Max Price₹48.74
Buy₹6,058,17519 Jun 19
Jayesh Shah
EntityIndividual
Role
Member of the Board of Directors
CFO & Whole Time Director
Shares100,000
Max Price₹60.58
Buy₹297,50019 Jun 19
Aayojan Resources Pvt Ltd
EntityCompany
Shares5,000
Max Price₹59.50
Sell₹15,684,43431 May 19
Susheel Kaul
EntityIndividual
Shares200,000
Max Price₹78.84

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Sanjaybhai Lalbhai (65yo)

    Chairman & MD

    • Compensation: ₹62.56m
  • Jayesh Shah (59yo)

    CFO & Whole Time Director

    • Tenure: 17.2yrs
    • Compensation: ₹41.50m
  • Ramnik Bhimani

    Compliance Officer & Company Secretary

    • Compensation: ₹3.18m
  • Punit Lalbhai (37yo)

    Executive Director

    • Tenure: 7.5yrs
    • Compensation: ₹32.48m
  • Kulin Lalbhai (34yo)

    Executive Director

    • Tenure: 7.5yrs
    • Compensation: ₹32.83m
  • Pragnesh Shah

    Chief Executive Officer of Cotton & Agri Business

    • Tenure: 7.3yrs
  • Abhishek Bansal

    Head of Sustainability & BR Head

    • Samir Agrawal

      Chief Strategy Officer

      • Kaushal Shah

        Investor Relations Officer


        Board Members

        • Renuka Ramnath (58yo)

          Independent Director

          • Tenure: 9.3yrs
          • Compensation: ₹680.00k
        • Sanjaybhai Lalbhai (65yo)

          Chairman & MD

          • Compensation: ₹62.56m
        • Jayesh Shah (59yo)

          CFO & Whole Time Director

          • Tenure: 17.2yrs
          • Compensation: ₹41.50m
        • Bakul Dholakia (72yo)

          Independent Director

          • Tenure: 3.5yrs
          • Compensation: ₹820.00k
        • Nilesh Shah (56yo)

          Independent Director

          • Tenure: 4.7yrs
          • Compensation: ₹820.00k
        • Punit Lalbhai (37yo)

          Executive Director

          • Tenure: 7.5yrs
          • Compensation: ₹32.48m
        • Kulin Lalbhai (34yo)

          Executive Director

          • Tenure: 7.5yrs
          • Compensation: ₹32.83m
        • Dileep Choksi (70yo)

          Independent Director

          • Tenure: 5.7yrs
          • Compensation: ₹840.00k
        • Arpit Patel (61yo)

          Independent Director

          • Tenure: 0.7yrs

        Company Information

        Arvind Limited's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Arvind Limited
        • Ticker: 500101
        • Exchange: BSE
        • Founded: 1931
        • Industry: Textiles
        • Sector: Consumer Durables
        • Market Cap: ₹11.373b
        • Shares outstanding: 258.77m
        • Website: https://arvind.com

        Location

        • Arvind Limited
        • Naroda Road
        • Ahmedabad
        • Gujarat
        • 380025
        • India

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        500101BSE (Mumbai Stock Exchange)YesEquity SharesININRJun 1998
        ARVINDNSEI (National Stock Exchange of India)YesEquity SharesININRJun 1998

        Biography

        Arvind Limited, together with its subsidiaries, manufactures, supplies, and exports textiles worldwide. The company operates through Textiles, Advanced Material, and Others segments. It offers denim fabrics, shirting fabrics, woven and knitted fabrics, and voiles and garments products. The company also provides a range of specialized clothing and accessories for factory workers, fire-fighters, construction crews, soldiers, and healthcare and security personnel; hot-gas and liquid filtration products; interiors and seating solutions; and composites and coated fabrics. In addition, it supplies water and waste water treatment plants for industrial process, and waste water and zero liquid discharge solutions. Further, the company is involved in the e-commerce, technical textiles, agriculture produce, telecommunication, and other businesses, as well as offers EPABX and one to many radio solutions. Arvind Limited was founded in 1931 and is headquartered in Ahmedabad, India. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/22 12:41
        End of Day Share Price2020/01/22 00:00
        Earnings2019/09/30
        Annual Earnings2019/03/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.