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Arvind Mills decides to don new clothers, comes back in fashion

Monday, September 3, 2007

Arvind Mills had risen 4% to Rs 48.20 at 14:29 IST on reports it is planning to undertake a major restructuring exercise.

The BSE Sensex,meanwhile, was up 164.16 points, or 1.09%, to 15,287.14, tracking firm Asian markets due to easing of political worries, strong Q1 GDP growth data and lower inflation.
On BSE, 15.08 lakh shares of the scrip were traded. The stock had an average daily volume of 9.69 lakh shares on BSE in past one quarter.
Arvind Mills had touched a high of Rs 48.70 and a low of Rs 46.80 so far during the day. The stock had hit a 52-week high of Rs 73.50 on 14 September 2006 and a 52-week low of Rs 41.50 on 2 August 2007.
The scrip of the mid-cap denim manufacturer had outperformed the market in the one month to 30 August 2007, adding 2.66% as against the Sensex's 1.25% gain. It had, however, underperformed the market in the past three months, accumulating 1.20% against the Sensex's 3.78% rise.
The company has an equity capital of Rs 209.38 crore. Face value per share is Rs 10.
At the current price of Rs 48.20, the scrip trades at a PE multiple of 43.42, based on Q1 June 2007 annualised EPS of Rs 1.11.
As per reports, Arvind Mills will undertake a major restructuring exercise. The group will merge its strategic business units (SBUs) into two main divisions: apparels and textiles. The move entails job cuts and cost cutting of up to 30%, an initiative to address the rupee crisis, report suggests.
Reportedly, the strategic business units in the fabrics division, including denims, shirting, khakis, knitwear and voiles, will now be merged and controlled by one business head. Similarly, the businesses in the apparel division, including brands and retail, will be merged as well. This will lead to proper integration among different businesses, focused and joint initiatives and streamlined operations.
Arvind Mills’ net profit rose 25.7% to Rs 5.82 crore on a 21.3% increase in sales to Rs 510.33 crore in Q1 June 2007 over Q1 June 2006.
Arvind Mills owns various brands like Flying Machine, Newport and Ruf & Tuf jeans and Excalibur shirts. The company services the entire domestic market besides exporting to neighboring countries.

Posted by pp at 8:11 AM  

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