Arvind Limited · NSE:ARVIND
Arvind — Q1 2008-09 Earnings Presentation
23 slides from Arvind's earnings presentation, Jul 31, 2008
Slide 1: Arvind Limited Board of Directors Meeting
Arvind Limited Board of Directors Meeting 31st July 2008 ARVIND LIMITED
Slide 2: Financial Performance
FINANCIAL PERFORMANCE ALVIND
Slide 3: The Arvind Mills Limited
The Arvind Mills Limited • The earnings of the QI company continue to be Particulars 2008-09 2007-08 Change % depressed on account of Net Sales/Income from Operations 545 515 age 6% weak denim markets Other Income 12 1 1500% coupled with rapid rise Revenues 558 515 8% in the input cost Total Expendi
Slide 4: Hedging Policy
Hedging Policy • The company has been following a consistent hedging policy for last 6 years of selling the dollar forward for net exposure of next financial year – The company has been never out of money in the past – Current financial year is the first time we are out of money • The government of
Slide 5: Foreign Exchange Hedging
Foreign Exchange Hedging +7 Rupeesto DODar 38 e 2 & PP AN Ait SN AS Sh SN Sh SN Sh PP PP PP SY i eed eas oe OS SS SE ES ease oe =—=MarketUSD Rate = Arvind Rate AVI N D
Slide 6: Significant Transactions
Significant Transactions • Following the principles laid in Accounting Standard 30 – Financial Instruments - Recognition and Measurement issued by The Institute of Chartered Accountants of India with effect from 1st April 2008 and – Instruments qualifying for hedge accounting, the net unrealised los
Slide 7: Sale of Land
Sale of Land • Property measuring 88100 square meter at a place called Sanavad near Ahmedabad sold for Rs.12.75 Crores • Net profit after all expenses is Rs. 5.22 Crores and included in other income
Slide 8: Arvind Mills Sales Mix
Arvind Mills Sales Mix ALVIND
Slide 9: Business Analysis
BUSINESS ANALYSIS ALVIND
Slide 10: Denim
Denim • The sales and realization performance of denim improved on back of higher prices in domestic markets on back of rate hike to offset the cotton price increase and also continued growth in export realization due to better product mix • The volume and realization increase has not offset the imp
Slide 11: Shirting
Shirting • The Shirting continues to deliver performances which are historical highs . • The operational parameters in Shirting continue to be high • The business could come under pressure due to pressure in the domestic market and also largely due to significant new capacities getting commissioned
Slide 12: Shirts
Shirts • The business continues to do Shirts Volume & Realisation well in the current quarter and the realization is 1.20 450 continuously improving 1.00 399 400 396 0.97 0.96 400 0.91 0.89387 387 • The operational parameters 362 360 357 350 are optimized and the order 0.80 0.76 0.76 0.70 book conti
Slide 13: Jeans
Jeans • The business achieved best ever operational performance during the quarter in terms of production and productivity • The profitability of the business in spite of operational performance was impacted by air freight and shortage of staff
Slide 14: Knits
Knits • There has been a management change in Knits during current quarter and initial results have been very encouraging • The garmenting operations achieved an average of 17000 pieces per day as against 13000 in the past • The order book for garment is robust and profitable
Slide 15: Brands & Retail
Brands & Retail • The sales has increased by 36% over corresponding quarter previous financial year • Even though the end retail sales went through one of most rough quarters in last two years initially due to IPL and subsequently due to negative economic news the business achieved the profit target
Slide 16: Business Environment
BUSINESS ENVIRONMENT ALVIND
Slide 17: Cotton Prices
Cotton Prices Rupees per Candy 31,000 29,000 27,000 25,000 23,000 21,000 19,000 17,000 15,000 13,000 Cotton Cost Comparision & Movement PS SPE EEE EEE PEEP ESE CEE ESE EE ——Internation Cotton ——IndianCotton ——Arvind Cost AVI a) D
Slide 18: Cotton Cost
Cotton Cost • The cotton prices have gone up substantially in last one year against the fundamentals on back of global commodity boom – The prices are artificially high in spite of increased production and falling demand – The company was managing with inventory bought almost 2 years back • During t
Slide 19: Energy Cost
Energy Cost • Cost of power cost at Naroda is Rs. 5.27 Kwh and at Santej is Rs.7.85 per Kwh as against previous year average of 4.10 and 4.80 respectively • Apart from the substantially higher cost the impact of staggering is even larger , with Gujarat government proposing almost 40% staggering • Al
Slide 20: Dyes & Chemicals Cost
Dyes & Chemicals Cost 95 r+ 430 85 + 380 65 2 - 330 o 3 4 33 4 _ + 280 45 35 + 230 33 15 180 Nov-o7 Dec-o7 Jan-o8 Feb-o8 Mar-o8 Apr-o8 Mav-08 Jun-o8 Jul-o8 ——CausticLve ——Hydro ——TIndigo ALVIND
Slide 21: Management Response to Cost Escalation
Management Response to Cost Escalation • Apart from trying to mitigate the macro economic factor the company recognizes the need to cut down the cost of doing business dramatically and has embarked on significant surgical cost reduction initiatives, the exercise is broadly split into two large categ
Slide 22: Outlook
Outlook • The company would like to maintain a cautious outlook due to difficult all over conditions in the fabric business • The company is very confident of growing the Value Apparel retail business under the MegaMart umbrella. – in difficult times value retailers do much better business globally
Slide 23: Thank You
Thank You ALVIND ARVIND LIMITED