With improving earnings visibility, steady margin expansion, and rising return ratios, Arvind Fashions is well positioned as a high-quality compounding story in India’s branded fashion space. Its balanced portfolio, scalable model, and strengthening financial metrics offer a compelling risk-reward profile.
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Motilal Oswal Report
Motilal Oswal initiates coverage on Arvind Fashions Ltd. with a 'Buy' rating and a target price of Rs 725, signaling a 46% upside from the current market price of Rs 496.
The brokerage highlights that Arvind Fashions, part of the Lalbhai Group, has successfully transitioned from a post-Covid consolidation phase to a profitable growth trajectory anchored by five marquee brands—U.S. Polo Assn. (USPA), Arrow, Tommy Hilfiger, Calvin Klein, and Flying Machine.
Valuation and view
Arvind Fashion stands at an inflection point, transitioning from consolidation into profitable scale-up with a sharper focus on five power brands.
This phase of growth will be driven by scaling up core brands, expanding adjacencies profitably, and driving operating leverage. USPA is evolving into a full lifestyle brand, with a third of its revenue coming from non-apparel, while Tommy and CK are strengthening their premium positioning with mid-teen Ebitda margins.
Arrow and Flying Machine are entering a scale-up phase through sharper brand positioning and modern retail formats. Collectively, these initiatives are expected to drive ~13% revenue CAGR and ~190bp margin expansion over FY26-28E, taking pre-Ind AS Ebitda margin to 10.3% by FY28E.
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