Arvind Ltd (ARVIND)
CyclicalFairStock Score: 26/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹571.85 |
| Market Cap | ₹15,556.64 Cr |
| P/E Ratio | 36.24 |
| ROCE | 13.04% |
| ROE | 10.66% |
| Dividend Yield | 0.71% |
| Profit Growth | -35.34% |
| Debt/Equity | 0.4 |
| Sales Growth | 1.12% |
| Promoter Holding | 39.53% |
| 52-Week Range | ₹277.9 — ₹607 |
| Sector | Textiles & Apparels |
| Book Value | ₹154.29 |
Strengths
- Manageable leverage with Debt/Equity of 0.39
- ROCE of 13.04% provides a reasonable capital efficiency cushion
- Piotroski F-Score 7/9 indicates sound recent financial health
- Sales growth of 13.57% shows demand traction; latest quarter sales ₹2,373 Cr and net profit ₹101 Cr
Concerns
- ROE of 9.10% is mediocre, yet the stock trades at 2.98 times book value
- Profit growth of 9.29% lags sales growth of 13.57%, signaling margin pressure
- P/E of 21.91 and PEG of 1.92 leave little margin of safety for a cyclical apparel business
- Dividend yield of 1.07% is low; promoter holding of 39.53% is moderate, not commanding
AI Analysis
Arvind is a business I can understand: making and selling garments and apparel. In investing, intelligible operations are a plus, but understandability alone doesn't justify ownership. At ₹388.45, the market capitalizes the company at ₹9,217 crore. That means I'm being asked to pay 21.91 times earnings for a firm earning 9.10% on equity and 13.04% on capital employed. A 9.1% ROE is mediocre; I'd rather own a business that consistently earns more than my capital cost. Nearly 3 times book value for that quality is not a Graham bargain. The balance sheet looks okay—debt/equity of 0.39 is manageable, and ROCE of 13.04% gives some cushion. The Piotroski score of 7/9 suggests the company isn't financially distressed. The latest quarter, with sales of ₹2,373 crore and net profit of ₹101 crore, is respectable. But I noticed that sales grew 13.57% while profit grew only 9.29%. That tells me the company is working harder and keeping less—margin pressure. For a cyclical garment business, I don't want to pay a PEG of 1.92 for that. The stock has fallen from ₹600 to ₹388.45; Mr Market is less enthusiastic. Still, at 21.9 times earnings and a 1.07% dividend yield, the reward doesn't justify the risk. Promoter holding of 39.53% is decent but not a controlling vote of confidence. I'd rather wait for a lower price or for proof that returns on equity are improving. This is a watch-list idea, not a quality compounder at this price.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer