Arvind Fashions targets 20% ROCE in the next few years
Arvind Fashions aims to achieve a 20 per cent return on capital employed (ROCE) in the next few years. For this, the company plans to adopt a multifaceted approach, including a commitment to profitability, margin enhancement, and rigorous control over working capital, says Shailesh Chaturvedi, Managing Director and CEO.
In Q3 FY24, Arvind Fashions’ revenues grew by 18 per cent and its profit margin surged by 150 basis points. The company plans to retain its profit margins at 100 basis points every year. It is confident that its margin will sustain at the current level of 53.3 per cent which is a sharp nearly 480 basis point improvement.
The company is witnessing a growing demand for premium apparels, notes Chaturvedi. Demand for more differentiated products from its brands including Tommy Hilfiger, Calvin Klein, Arrow, US Polo is growing, adds Chaturvedi. The company will continue to focus on the premiumisation of its apparels.
Despite weak consumer sentiment, Arvind Fashions anticipates sustaining its momentum, particularly in offline channels, with a targeted 10 per cent growth rate. Though a conscious destocking of their B2B online wholesale segment may lead to short-term sales drops, but Chaturvedi is optimistic about continued growth, especially in their B2C marketplace model.
