Equity Research INDIA

June 19, 2019

BSE Sensex: 39046

ICICI Securities Limited

Arvind Fashions Ltd ADD
is the author and
distributor of this report Striking balance between growth and cashflow Rs755
We initiate coverage on Arvind Fashions Ltd (ARVINDFA), the demerged entity
from Arvind Ltd, with an ADD rating and a target price of Rs860/share based on
Initiating coverage 15x FY21E EV/E. While ARVINDFA enjoys strong portfolio of profitable power
brands; sub-scale emerging brands and highly competitive specialty retail are
unlikely to generate meaningful RoCE at least over the next two years impacting
Branded the overall RoCE and valuations. As management focuses on improving cash flow
Apparels and RoCE, near-term growth is likely to be impacted. The stock has corrected
~28% in the last two months factoring this concern and now trades at a
Target price: Rs860 reasonable 13.3xFY21E EV/E. We believe return of mid-teen growth along with
improved cashflow and RoCE would be required for any meaningful rerating,
which seems unlikely in the next two years.
Shareholding pattern
Mar
 FY20E revenue/EBITDA growth likely to be in high single digits as management
'19 focuses on improving cashflow and RoCE by: 1) exiting long credit cycle trade
Promoters 36.0 channels, 2) exiting few sub-scale ‘emerging brands’ and 3) curtailing aggressive
Institutional growth plans in the value-retail format, Unlimited. Besides, exiting sub-scale brands
investors 31.1
MFs and others 11.6 (~Rs2bn revenue in FY19) is likely to entail one-time exit costs during FY20E.
FIs and Banks 1.5  We value only profitable ‘power brands’ (60% of FY19 revenue): ARVINDFA
Insurance Cos. 0.0
FIIs 18.0 enjoys a strong portfolio of ‘power brands’ comprising US Polo (USPA), Arrow,
Others 32.9 Flying Machine and Tommy Hilfiger, which are mainly focused on high-growth
Source: BSE casual and denim menswear segments, and enjoy 25%+ RoCE. USPA is one of the
fastest-growing casual-wear brands (~Rs12bn revenues in FY19) with huge potential
of growth via brand extension, category extension, etc. We factor lower 9% revenue
CAGR for power brands over FY20-FY21E as management exits long credit cycle
Price chart trade channels and build-in flat EBITDA margin owing to investment in new
1,150 categories (say innerwear) and network expansion.
1,050  Specialty retail and ‘emerging brands’ available virtually free as they are
950 unlikely to generate meaningful EBITDA at least till FY21E. Unlimited operates in
850 highly competitive environment, which impacts profitability / RoCE. Management has
recently curtailed its aggressive growth plans in Unlimited as EBITDA losses in
(Rs)

750
650
specialty retail increased from Rs150mn in FY18 to Rs430mn in FY19 mainly due to
550
higher losses in Unlimited. Improving profitability of beauty format Sephora and a
foreign brand GAP is unlikely to offset losses of Unlimited over next two years, in our
450
view. ‘Emerging brands’ (e.g. Calvin Klein, Aeropostale, Ed Hardy, The Children’s
Mar-19

Apr-19

Jun-19
May-19

Place) are yet to attain scale and contribute meaningfully to overall EBITDA.
 Net debt unlikely to increase from FY19 level of Rs8bn over the next two years
as management focuses on improving cash flow. We expect ARVINDFA to generate
OCF of Rs3bn (after factoring-in Rs2bn working capital release from exit of sub-
scale emerging brands) which should suffice its capex requirements over FY20-21E.
In the past, ARVINDFA’s OCF has not been able to fund growth, which, therefore,
has been funded by parent Arvind's cash flow, private equity investments and debt.
 Key triggers: Acceleration in ‘power brands’ growth, sharp improvement in RoCE.
 Key risks: Inventory obsolescence, lower consumption growth.
Market Cap Rs44.6bn/US$637mn Year to Mar 2018 2019 2020E 2021E
Bloomberg ARVINDFA IN Revenue (Rs mn) 42,189 46,439 49,627 55,354
Shares Outstanding (mn) 58.6 EBITDA (Rs mn) 2,294 2,881 3,057 3,924
Research Analysts: 52-week Range (Rs) 1059/620 Net Income (Rs mn) 145 166 165 850
Krupal Maniar, CFA Free Float (%) 64.0 % Chg YoY NA 14.6 (0.6) 415.0
krupal.maniar@icicisecurities.com FII (%) 18.0 P/E (x) 306.2 267.1 268.7 52.2
+91 22 6637 7254 Daily Volume (US$'000) NA CEPS (Rs) 26.5 29.3 31.0 45.1
Dharmesh Shah
Absolute Return 3m (%) 0.3 EV/E (x) 22.3 18.1 17.0 13.3
shah.dharmesh@icicisecurities.com
+91 22 6637 7480 Absolute Return 12m (%) NA Dividend Yield (%) - - - -
Sensex Return 3m (%) 2.8 RoCE (%) 5.0 6.7 6.9 9.1
Sensex Return 12m (%) 10.6 RoE (%) 1.6 1.5 1.5 7.2
Please refer to important disclosures at the end of this report
Arvind Fashions Ltd, June 19, 2019 ICICI Securities

TABLE OF CONTENT

Initiate with ADD and a target price of Rs860/share .................................................... 3 

Diversified play with strong brands portfolio ............................................................... 4 
Profitable ‘power brands’, USPA to lead growth .......................................................... 7 
Emerging brands: Rightsizing the portfolio................................................................ 11 
Speciality Retail: In stabilisation phase ...................................................................... 13 
Focus on improving cashflow ...................................................................................... 15 
Key assumptions ........................................................................................................... 17 
Key risks ......................................................................................................................... 18 
Financial summary ........................................................................................................ 20 
Annexure: Index of tables and charts.......................................................................... 21 

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Initiate with ADD and a target price of Rs860/share

We initiate coverage on Arvind Fashions Ltd. (ARVINDFA), the demerged entity from
Arvind Ltd, with an ADD rating and target price of Rs860/share based on 15x FY21E
EV/E, a 33% discount to our target multiple for ABFRL given its relatively weak
cashflow generation and muted return ratios.
We expect ARVINDFA’s FY20E revenue and EBITDA growth to be in high single
digits as the management focuses on improving cashflow and return ratios by: 1)
exiting long credit cycle trade channels, 2) exiting sub-scale ‘emerging brands’, and 3)
curtailing aggressive growth plans in the value retail format, Unlimited.
Chart 1: Management expects sharp improvement in RoCE over coming years

Strategic Rapid Expansion & Consolidation to Improve Growth with Improved

Intent Growth Profitability & Capital Efficiency Profitability & ROCE

Revenue &
Growth

EBITDA

ROCE
* One Time Brand Exit Costs

Source: Company data, I-Sec research

The stock has corrected ~28% in last two months factoring this concern and now
trades at a reasonable 13.3x FY21E EV/E. We believe return of mid-teen growth along
with improved profitability, cashflow and return ratios would be required for any
meaningful rerating, which is unlikely in the next two years.
Table 1: Valuations based on 15x FY21E EV/E
(Rs mn)
Target EV/ EBITDA multiple (x) 15
Target EV (Rs mn) 57,962
Net debt / (cash) (Rs mn) 8,076
Target value (Rs mn) 49,886
No. of shares (mn) 58
Target price per share (Rs) 860
Source: I-Sec research

Table 2: Comparative valuations with peers

CAGR (FY19-21) (%) RoE (%) RoCE (%) EV/EBITDA (x) EV/sales (x)
Company Revenue EBITDA PAT FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
ABFRL 12.7 21.5 12.2 25.5 17.7 21.2 14.7 12.3 14.6 32.6 26.6 21.6 2.2 2.0 1.7
ARVINDFA 9.2 16.7 126.3 1.5 1.5 7.2 6.7 6.9 9.1 18.1 17.0 13.3 1.1 1.1 0.9
SHOP* 8.2 18.1 24.9 10.1 12.1 13.4 7.4 9.2 10.6 16.1 13.7 11.5 1.1 1.0 0.9
TCNS* 16.9 21.4 22.0 25.0 18.8 18.7 16.0 20.4 19.8 26.7 22.0 18.1 4.1 3.5 3.0
TRENT 19.1 26.5 54.2 12.4 14.6 16.9 10.3 11.7 13.2 39.4 30.4 24.3 3.9 3.2 2.7

P / E (x) P/B (x) P/CEPS (x) EV/EBIT (x)

Company FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
ABFRL 50.6 58.6 40.2 11.4 9.5 7.7 26.9 28.4 22.3 53.7 40.2 31.7
ARVINDFA 264.8 266.3 51.7 3.9 3.8 3.6 25.9 24.4 16.8 37.5 35.2 23.4
SHOP* 45.4 33.5 27.0 4.2 4.0 3.5 18.3 15.8 13.6 33.6 24.4 19.9
TCNS* 38.3 39.8 33.3 8.0 6.7 5.7 33.2 32.7 26.8 30.3 25.9 21.1
TRENT 74.8 55.3 42.7 9.7 8.6 7.5 52.2 39.9 31.8 44.0 33.9 26.7
Source: I-Sec research, *Bloomberg consensus

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 Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Diversified play with strong brands portfolio

ARVINDFA has built a strong portfolio through multiple brands across categories and
price points across the multi-channel space. It owns a large portfolio of both owned
and licensed brands with each brand appropriating sharp and differentiated consumer
propositions. It has presence across key segments – premium to ‘bridge to luxury’
(Tommy Hilfiger, Calvin Klein, etc.), mainstream (US Polo, Arrow, Flying Machine,
etc.), a play on the value fashion segment through the Unlimited.
ARVINDFA was able to garner a sizeable pie in menswear segment with its
formal/casual and denim range of brands in each segment. In kidswear market, it has
more brands in the premium and mainstream segment. Of late, the company has
become aggressive in the innerwear market with premium brands.

Chart 2: ARVINDFA has built a diversified portfolio Chart 3: Experience of successfully

across categories and price points launching brands across all formats

Source: Company data, I-Sec research Source: Company data, I-Sec research

ARVINDFA has relatively higher share in the growing casual/denim wear segment
through its dominant portfolio of brands, which makes it the numero uno player in the
segment.

Chart 4: One in five casual wears bought in premium branded Chart 5: Key competitors
men’s casual/denim market is from ARVINDFA portfolio

Source: Company data, I-Sec research Source: I-Sec research

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 Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Chart 6: Growth in casuals / western wear segment to Chart 7: Premium casuals/ denim
outperform formal wear segment leadership revenues grew 20% YoY
in FY19
Category 2014-2025
(US$ bn) 2014 2020 2025 CAGR
Sales
Men’s formals 3.6 5.0 9.0 ~10-15%
+20%

Men’s casuals 1.4 5.0 12.5 ~20%

Women’s western 0.7 2.5 7.5 ~20%

Womens Ethnic 1.7 2.7 5.2 ~15%

Kids 2.7 4.7 7.0 ~15%

FY18 FY19
Innerwear++ 1.6 4.1 8.3 ~15%

Source: ABFRL, I-Sec research Source: Company data, I-Sec research

Management has identified opportunities for long-term growth potential in the growing
kidswear, innerwear and beauty & personal care market.

Chart 8: Kidswear grew 25% in Chart 9: Accelerating USPA Chart 10: Sephora plans to
FY19 innerwear growth expand stores and add online to
sustain high growth

+25%
+54% +35%
Sales
Sales

Sales

FY18 FY19 FY18 FY19 FY18 FY19

US Polo innerwear sales doubled

Market Position – Making Significant

Market Position #1 /
Strides in Mid- Price to Premium Significant Online
Market Position #1 Market Opportunity

Source: Company data, I-Sec research Source: Company data, I-Sec research Source: Company data, I-Sec research

Besides, ARVINDFA differentiates its portfolio in three key categories: ‘power brands’,
‘emerging brands’ and speciality retail which are at different stages of maturity, margin
profiles and return ratios.

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
Chart 11: Multiple growth opportunities through Chart 12: Powerful platforms drive growth with
category/ distribution expansion improved operational efficiency

Power
Brands

Specialty
Retail

Emerging
Brands

Present Multiple Growth Opportunities through.. Drive Growth with Improved

• Category Expansion
Operational Efficiency
• Distribution Expansion

Chart 13: ARVINDFA enabled by powerful existing platforms

• 250+ designers & merchants

Product/Design • Deep understanding of Indian consumer

requirements
Capabilities
• Innovation leader

• Distribution strength: 1300+ stores across 180

cities, 1800+ mom-n-pop stores, 1400+ dept.
store counters
Go To Market
• Strong brand building capabilities. Scaled up
Capabilities some of the 10 Lifestyle Brands in India
• Building strong Omnichannel Capabilities

• Scaled up business without any

Sourcing manufacturing investments
Capabilities • Sourcing 33 Mn+ pcs/annum, across 51+
categories

Chart 14: Strong distribution footprint across portfolio

FY18 Exit Store Changes FY19 Exit

Closure Store Sq Ft
Store Count Sq Ft (Lacs) Additions
Count (Lacs)

Power Brands 940 8.1 148 70 1018 8.9

Unlimited 101 9.7 20 14 107 10.8

Speciality Retail 29 1.3 6 0 35 1.5

Total* 1297 21.5 218 125 1390 23.7

Source: Company data, I-Sec research

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 Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Profitable ‘power brands’, USPA to lead growth

ARVINDFA’s ‘power brands’ portfolio includes India’s largest casualwear brand (US
Polo Association), fastest-growing denim brand (Flying Machine), a large formal wear
brand (Arrow) and a licensed international brand (Tommy Hilfiger). ‘Power brands’
revenue grew 9% YoY (~60% contribution) to Rs28bn in FY19 and the portfolio enjoys
low double-digit margins.

The ‘power brands’ are expected to remain at forefront as: i) they are among the top
Indian apparel brands; ii) have strong growth potential with new stores viable in short
span; and iii) enjoy significant sourcing leverage.

Management is focused on increasing the share of higher-growth casual and denim

menswear, diversifying the portfolio through category expansion into newer segments
such as athleisure, innerwear, kidswear and accessories, and rapid network
expansion mainly in small towns and online channels.

Table 3: Summary of ‘power brands’ portfolio

Brands Particulars Potential opportunities
 Launched in 2009, first brand in India representing a super-  High potential in category expansion: kids,
premium lifestyle and approachable premium pricing. innerwear & footwear categories.
 Licensing agreement for perpetual period.  Combined potential to reach >Rs10bn+
revenues by FY22, as per management.
 USPA emerging as India’s leading lifestyle brand. Fastest to  Scaling up the denim segment.
cross Rs10bn with innerwear sales doubling in FY19 and
reaching three-digits mark.
 Enjoys EBITDA margin in mid to high teens with RoCE of
>35%.
 Category expansion / brand extensions providing growth
over last few years.
 Wide distribution network with presence across >125 cities.
 India's first home-bred jeans brand launched by ARVINDFA  Introduced varied sub-brands to cater to varied
in 1980. price points.
 One of the fastest growing denim brands and among the top  'FM Blue Label' for department stores and
three denim brands in India. EBOs.
 Revenues are likely Rs4.5bn-5bn with EBITDA margin in low  'Flying Machine' for online channel.
double digits in FY19.
 'FMX' for value channel.
 Launched in 1993; one of the large formal wear brands.  Arrow New York for younger consumers with
entry-level price points. It serves the dual
purpose of semi-casual and evening wear.
 Licensing agreement up to 2038 with an option for auto-  Introduced suits and blazers for special
renewal. occasions and is expected to gain momentum
over next 12-18 months.
 Though growth has been impacted over the last few years in  Specific categories for online channels.
formal wear (industry-wide phenomenon), Arrow remains the
second-largest ARVINDFA brand with likely revenues of
~Rs7bn in FY19 with 50-60% revenues contributed by
formalwear.
 Arrow sport brand extension witnessed strong growth and
contributes 34% of the revenues.
 Arrow denim has strong presence in online channels.
 Launched in 2004, one of the large brands in super-premium  High potential in category expansion: kids,
denim / casuals. footwear and accessory categories.
 ARVINDFA has set up 50% JV for marketing this brand in  New: Tailored and Jeans.
India.
 Licensing agreement is for perpetual period.
 Revenues are likely Rs3.5bn-4bn with EBITDA margin in
high single digit in FY19.
Source: Company data, I-Sec research

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 Arvind Fashions Ltd, June 19, 2019 ICICI Securities
In addition to the foregoing, the ‘power brands’ portfolio has strong distribution network
comprising 1,018 EBOs with 0.89mn-sqft space as at FY19-end and also sells through
MBOs and department stores. ARVINDFA aims to leverage its wide distribution reach
to launch and scale-up new product categories.

Table 4: Significant store expansion opportunity Chart 15: Online sales of ‘power brands’ grew
for ‘power brands’ in small towns significantly in FY19 on low base

Power brands 3rd PartyOnline Own Online Incl. Omni

+48% +331%
FY19
Cities Gr%
Univ.
Sales
Cities Contr.
Tier
(Stores)
II/III

363 156 25.3% 23% FY18 FY19 FY18 FY19

Source: Company data, I-Sec research

Management has recently decided to exit some of the customers with long credit
cycle. Accordingly, the company’s revenue growth was down by 8% YoY in Q4FY19.
Besides, investments and ad spend will likely continue due to category and network
expansion. Accordingly, margins are likely to remain range-bound over the next two
years, in our view. However, there can be an improvement over the medium term led
by acceleration in growth.

We expect ‘power brands’ to register 9.3% revenue and 8.5% EBITDA CAGR over
FY19-FY21E with EBITDA margin likely to remain flat over the same period. Cashflow
from ‘power brands’, especially USPA, will be crucial to fund the company’s growth.

Chart 16: We expect revenue from ‘power brands’ Chart 17: … and EBITDA to grow at 8.5% CAGR
to grow at 9.3% CAGR over FY19-FY21E… with flat margins as investments for new
category and network expansion continue

Revenues % YoY (RHS) EBITDA EBITDA margin (RHS)

35,000 10.0 4,500 12.3 12.5

9.6 12.1
4,000 12.1
32,500 9.5
3,500 12.0
9.0 9.0
30,000 9.0 3,000
11.5
(Rs mn)
(Rs mn)

2,500
27,500 8.5
2,000
11.0
25,000 8.0 1,500
10.9
1,000 10.5
22,500 7.5
500
20,000 7.0 - 10.0
FY18 FY19 FY20E FY21E FY18 FY19 FY20E FY21E

Source: Company data, I-Sec research Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
USPA case study: Category and network expansion key to sustainable
growth
Category expansion powering the super brand
USPA is the most successful brand in ARVINDFA’s portfolio with revenues of
>Rs10bn and strong margins (in mid to high teens) and RoCE of >35%. The brand
was launched in 2009 as a men’s casualwear brand accounting for 100% of revenues,
which has been brought down to nearly 50% by FY19 with category expansion in
men’s denim, kidswear, womenswear, innerwear, etc. Going ahead, management
focus will be on diversifying the product portfolio, especially in kidswear, innerwear
and footwear. These categories have potential to increase combined revenues of
>Rs10bn by 2022, as per the management.

Chart 18: USPA expanded into denims, kids and Chart 19: USPA emerges as multi-category play
women segment from 100% mens casualwear with strong presence in causals/denims by FY19

FY14

Women, 4%

Kids, 16%

Mens
casuals,
51%

Mens Innerwear Denim

denim, 29%
Kids Casuals
Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 20: Combined potential of >Rs10bn Chart 21: USPA potential revenue mix by FY22
revenues by FY22 as per management

FY22
Active , 2% Footwear,
7%
Tailored,
2%
Mens
casuals,
Innerwear, 33%
19%

Women, 2%

Kids, 10% Mens

denim, 25%

Source: Company data, I-Sec research Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
Sustained high growth through network expansion
USPA has seen aggressive network expansion over the past few years with its
presence increased to >125 cities and more than 325 stores in FY19 against 95 cities
and 206 stores in FY15. Besides, its presence in departmental stores / MBOs has
increased from 429 counters in FY15 to >1,000 in FY19.

Chart 22: USPA multi-channel presence supports growth

Trade Online
Dept. Stores Retail

Source: Company data, I-Sec research

Chart 23: Flying Machine department stores’ Chart 24: Flying Machine online revenues have
including value fashion revenues grew 50% YoY in doubled YoY in FY19 on low base
FY19

1.5x 2x
x
x

FY18 FY19 FY18 FY19

Source: Company data, I-Sec research Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Emerging brands: Rightsizing the portfolio

ARVINDFA ‘emerging brands’ portfolio consists of ~8-10 brands across diverse
categories. Though some of these brands have been in existence for more than
decade, few were unable to achieve the required scale given that revenues from each
(except Calvin Klein) are less than Rs1bn and consume substantial managerial efforts
and capital. The ‘emerging brands’ portfolio revenues grew only 5% YoY to Rs7.4bn
(~16% contribution to total revenues) in FY19 as some of these brands are gradually
being withdrawn. Overall, the ‘emerging brands’ portfolio reported EBITDA margin loss
at ~1.8% in FY19.

Management plans to exit sub-scale non-strategic brands (likely four brands – Izod,
Elle, Gant, Nautica) in H1FY20 and targets to improve the segment’s profitability and
return ratios. These non-strategic brands together contributed revenues of ~Rs2bn
and were marginally loss making in FY19. We believe exiting these brands may lead
to one-time exit costs in FY20E, but will help improve profitability going forward and
free up capital and management bandwidth. Besides, the management is also looking
to de-risk the business model from retail dependence and making it more wholesale
and online driven to increase profitability.

In the core portfolio, the management has identified four key brands – Calvin Klein,
Aeropostale, Ed Hardy and The Children’s Place – as focus areas. We estimate these
brands fetched revenues of ~Rs4.5bn-5bn with marginal profit in FY19.

We estimate ‘emerging brands’ portfolio revenues to decline at 2.2% CAGR over

FY19-FY21E owing to exits of non-core brands. However, core portfolio revenues are
likely to grow in mid-to-high teens over the same period. At portfolio level, EBITDA
loss in FY20 is expected to increase due to the one-time exit loss, but the same is
likely to turn marginally profitable in FY21E. Accordingly, we believe the ‘emerging
brands’ are unlikely to attain scale and contribute meaningfully to overall EBITDA by
FY21E

Chart 25: Key emerging brands portfolio

Sales FY18: x FY22: 1.5x

EBITDA FY18 FY19

ROCE FY18 FY21

Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
Chart 26: We expect revenues in FY20E to Chart 27: We expect EBITDA loss to further
decline 14% YoY on exit of non-strategic brands widen in FY20E on one-time exit loss

Revenues % YoY (RHS) EBITDA EBITDA margin (%)

8,000 15.0 100 0.4 1.0

11.2
50
-
7,500 10.0 -
5.1 (50) (1.0)
7,000 5.0 (100) (1.8)

(Rs mn)
(2.0)
(Rs mn)

(150)
6,500 0.0 (200) (3.0)
(250) (4.0)
6,000 -5.0
(300)
(4.9) (5.0)
(350)
5,500 -10.0 (5.6)
(400) (6.0)
(14.0)

FY18

FY19

FY20E

FY21E
5,000 -15.0
FY18 FY19 FY20E FY21E

Source: Company data, I-Sec research Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Speciality Retail: In stabilisation phase

ARVINDFA introduced speciality retail through ‘Unlimited’ – a value retail format, and
tie-ups with GAP (a foreign brand) and Sephora (beauty retailer). With these tie-ups, it
has exclusive right to sell these brands on retail as well as e-commerce platforms.
Speciality retail portfolio revenues grew 16% YoY to Rs11bn (24% contribution) with
EBITDA margin loss (mainly in Unlimited – erstwhile Megamart) at ~4% in FY19.

This segment has witnessed multiple headwinds in the past – such as: i) Unlimited
unable to achieve profitability despite being in the market for more than two decades;
ii) imposition of CVD and lack of local sourcing for GAP, etc. ARVINDFA has started
local sourcing coupled with increased wholesale component for GAP, which led to
50% YoY revenue growth in FY19 after turning EBITDA-positive in Q4FY19. While
Sephora became profitable from its second year of operations and continues to
witness strong revenue growth.

EBITDA loss in speciality retail has significantly increased from Rs150mn in FY18 to
Rs430mn in FY19 mainly because of increased losses in Unlimited. Overall decline in
consumption impacting the value retail business coupled with increased ad spend led
to significant increase in losses of Unlimited.

Table 5: Summary of speciality retail portfolio

Brands Particulars Potential opportunities
 Launched in 1995 as a discount store (Megamart) with focus  Piloting advanced analytics based approach to ensure
on menswear. customer-centric merchandising strategies.
 Repositioned as Unlimited – value retail format with focus on
 Looking to close 10-15 loss-making stores in FY20.
mens, womens and kids wear.
 Reduced the store size to optimal size: 10,000sqft.  Leveraging on online platforms.
 Preferred locations: malls and high-traffic high streets.  Management targeting to reach breakeven by FY20-end.
 >90% of sales come from private labels; gross margins
improved from 38% to 45%.
 Store count has reduced from ~190 in FY14 to 107 in FY19.
 Significant additional marketing investments in FY19.
 ARVINDFA has entered into licensing agreements with GAP  Gross margin is on an uptrend due to local sourcing and
Inc. in Aug'14 for a period of 20 years. losses halved in FY19.
 GAP Inc. is a leading global retailer offering clothing,  Focus on expanding through new distribution channels
accessories, and personal care products for men, women, such as Shop-in-Shop (SIS), online, kids and franchisee
children, and babies under the GAP, Banana Republic, Old stores, which will contribute to growth and overall
Navy, Piperlime, Athleta, and Intermix brands. profitability.
 GAP margins were impacted by import duty as 100% of  Permission to open exclusive 'GAP Kids' store on
products sold are imported. franchise route.
 ARVINDFA has received approval and started local sourcing  Scaling up online presence.
 GAP turned EBITDA-positive in Q4FY19; revenues
increased by >50% in FY19.
 ARVINDFA entered into licensing agreement with LVMH in  Potential to grow to Rs7bn-8bn by FY22 with presence in
Sep'15. 50 stores, as per the management.
 Sephora is the world’s largest and leading beauty retailer
 High levels of customer loyalty
with a presence in 31 countries.
 Sephora is witnessing strong LTL growth with high levels of  Looking to enter into tier-2 cities to expand its
customer loyalty. addressable market size in coming years.
Huge potential upside through online platform –
 Profitable concept from second year of operations.
replicating the successful Sephora.com model in India.
 Number of stores has increased from four in FY16 to >15
stores in FY19.
Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
We believe, given the lack of a differentiating value proposition, Unlimited is likely to
face tough competition that may impact its profitability and return ratios. Management
has recently decided to stall its aggressive growth plans (earlier targeted 20-25 store
additions p.a.), consolidate existing stores and target breakeven by FY20-end. With
ongoing investments and adspends, improving profitability of Sephora and GAP is
unlikely to setoff losses of Unlimited over the next two years, in our view.
We estimate speciality retail portfolio revenues to grow at 16% CAGR over FY19-
FY21E led by >25% revenue CAGR in GAP and Sephora on low base, network
expansion and increasing contribution from online portal while Unlimited is expected to
grow in low double digits over the same period. We expect the portfolio to reach near-
breakeven with limited margin improvement in Sephora on continued investment for
store expansion and online portal. We also expect GAP to turn profitable in FY21E
with increasing scale, but Unlimited is unlikely to reach breakeven before FY23E.
Accordingly, we estimate EBITDA margin loss to decline from 3.9% in FY19 to 1% by
FY21E.

Chart 28: We expect specialty retail revenues to Chart 29: …while we expect EBITDA loss margin
grow at 16% CAGR over FY19-FY21E led by >25% to narrow down to ~1% by FY21E
revenues CAGR in GAP and Sephora…

Revenues % YoY (RHS) EBITDA EBITDA margin (%) - RHS

15,000 20.0 - -
16.5 16.4 (0.5)
15.3 (100)
16.0 (1.0)
12,500
(1.6) (1.5)
(200) (1.0)
(Rs mn)

12.0 (2.1) (2.0)

(Rs mn)

10,000 (2.5)
(300)
8.0 (3.0)
(400) (3.5)
7,500 (3.9) (4.0)
4.0
(500) (4.5)
FY18

FY19

FY20E

FY21E
5,000 0.0
FY18 FY19 FY20E FY21E
Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 30: GAP turned EBITDA-positive in Q4FY19 Chart 31: …increasing component of high-margin
led by increasing local sourcing and… wholesale business

FY18 FY19

0.5x

-3.0x -3.0x
Wholesale
-4.0x
Online
Q1 Q2 Q3 Q4
Retail

Source: Company data, I-Sec research Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Focus on improving cashflow

Arvind Ltd. demerged its branded apparel and engineering businesses in Nov’18 to
pursue their independent growth trajectories on the belief that entities, in course of
time, become self-sufficient to fund their own growth plans.

In FY17-FY19, ARVINDFA generated negative free cashflow of Rs12bn owing to weak

OCF generation mainly due to working capital blockage of Rs6.5bn and capex of
Rs9.6bn (including Rs5.6bn in FY17 towards acquisition of business control of Tommy
Hilfiger and Calvin Klein). Company’s net debt increased marginally over the same
period to Rs8.2bn by FY19 as capex and working capital requirements were funded
through equity issuance of ~Rs8.8bn in FY17 to private equity investor and ~R3bn to
existing shareholders in FY18 including parent company Arvind Ltd.

ARVINDFA’s cash conversion cycle has doubled YoY to 50 days in FY19 mainly led
by increase in inventory days (as Q4FY19 sales have been impacted) and elongated
receivables days mainly pertaining to wholesale channels. While peers have
registered marginal increase in cash conversion cycle over the same period.
ARVINDFA management has highlighted that it intends to optimise its working capital
days and focus on improving cashflow by exiting unduly long credit trade channels and
sub-scale ‘emerging brands’.

Chart 32: ARVINDFA cash conversion cycle* Chart 33: …while peer ABFRL have registered
have doubled YoY to 50 days in FY19 on increase marginal increase in the same to 14 days in FY19
in inventory days and elongated credit cycle over the same period*

FY17 FY18 FY19 FY17 FY18 FY19

250 250

200 200

150 150
(Days)

(Days)

100 100

50 50

- -
Inventory Receivables Payables Cash Inventory Receivables Payables Cash
conversion conversion
Source: Company data, I-Sec research; *adjusted for speciality retail Source: Company data, I-Sec research; *adjusted for Pantaloons
revenues revenues

Notwithstanding the above, we believe ARVINDFA would remain in transition phase

over the next 2-3 years as it tries to balance growth and cashflow as it is expanding its
brand portfolio and distribution reach. Accordingly, cashflow generation (even after
factoring Rs2bn release of working capital on divestment of some ‘emerging brands’)
and return ratios are likely to remain muted in the near term and net debt to remain flat
over the next two years, in our view.

15
Arvind Fashions Ltd, June 19, 2019 ICICI Securities
In the past, ARVINDFA’s OCF has not been able to fund growth, which therefore has
been funded by parent Arvind's cash flow, equity dilution and debt.

We estimate ARVINDFA to generate OCF before working capital requirement of

Rs4.5bn over FY19-FY21E, which will be utilises to fund working capital requirement
of Rs1.6bn and capex of ~Rs3bn over the same period.

Chart 34: ARVINDFA cashflow unable to fund Chart 35: OCF generations in next two years will
growth over FY17-FY19; the same has been be utilised to fund working capital and capex
funded by parent, equity dilution and debt

6,000 3,698 OCF Capex FCF

8,000
4,000
2,000 6,000
0 4,000
(2,000)
(Rs mn)

2,000

(Rs mn)
(4,000)
-
(6,000)
(8,000) (2,000)
(6,548)
(10,000) (4,000)
(12,000) (6,000)
(5,874) (12,422)
(14,000)
OCF Wcap Capex FCF (8,000)
blockage FY17 FY18 FY19 FY20E FY21E

Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 36: …accordingly net debt to remain flat at Chart 37: Return ratios may remain muted in
Rs8bn over FY19-FY21E FY20E and then improve

Net debt ND:EBITDA (RHS) 10.0 RoE RoCE

9,000 8.0 8.0

6.8
7.0
8,500 6.0
6.0
8,000 4.0
4.5 5.0
(Rs mn)

(%)

2.0
7,500 4.0
(x)

3.1
2.9
2.6 -
2.1 3.0
7,000
2.0 (2.0)
6,500
1.0 (4.0)

6,000 - (6.0)
FY16 FY17 FY18 FY19 FY20E FY21E FY17 FY18 FY19 FY20E FY21E
Source: Company data, I-Sec research Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Key assumptions
We expect company’s revenues to grow at 9% CAGR over FY19-FY21E led by 9%/
16% revenue CAGR in power brands and specialty retail respectively. While emerging
brands revenues are likely to decline by 2% CAGR over FY19-FY21E on exit of non-
strategic brands; core emerging brands revenue are expected to grow at 18% CAGR
over the same period.

We expect EBITDA to grow at 17% CAGR over FY19-FY21 with EBITDA margin likely
to increase by ~90bps to 7.1% by FY21E. We expect power brands margin broadly to
remain stable, emerging brands portfolio to turn marginally profitable by FY21E while
losses in specialty retail (especially Unlimited) to narrow down over next two years.

Table 6: We expect revenues/ EBITDA to grow at 9%/ 17% CAGR over FY19-FY21
FY18 FY19 FY20E FY21E
Revenues (Rs mn)
Power brands 25,660 27,970 30,492 33,413
Emerging brands 7,010 7,370 6,342 7,053
Specialty retail 9,530 11,100 12,794 14,888
Total revenues 42,200 46,440 49,627 55,354

% YoY
Power brands 9.0 9.0 9.6
Emerging brands 5.1 (14.0) 11.2
Specialty retail 16.5 15.3 16.4
Total revenues 10.0 6.9 11.5

EBITDA (Rs mn)

Power brands 2,790 3,440 3,679 4,046
Emerging brands (340) (130) (355) 32
Specialty retail (150) (430) (268) (154)
Total EBITDA 2,300 2,880 3,057 3,924

% YoY
Power brands 23.3 6.9 10.0
Emerging brands NA NA NA
Specialty retail NA NA NA
Total EBITDA 25.2 6.1 28.4

Margin (%)
Power brands 10.9 12.3 12.1 12.1
Emerging brands (4.9) (1.8) (5.6) 0.4
Specialty retail (1.6) (3.9) (2.1) (1.0)
Total 5.5 6.2 6.2 7.1
Source: Company data, I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Key risks
Threat from e-commerce players
As e-commerce players provide deep discounting, they impact profitability of the
premium players. ARVINDFA plans to counter this by providing facilities through
online portals though e-commerce players too have lately started focusing on
profitability. However, continuation of deep discounting strategy on e-commerce
platforms may pose a risk to our estimates.

Increase in royalty payments

ARVINDFA’s operations includes licensing / setting up JVs with international brands.
Total royalty payment in FY18 stood at Rs1.5bn, ~4% of sales. Any increase in royalty
payments would impact margins of the company.

Lower discretionary spending

Any material slowdown in the macro-economy and consequent impact on
discretionary spending will adversely impact our revenue and margin growth
estimates.

Higher competitive intensity

Presence of global and domestic brands along with entry of new brands in India will
keep competitive intensity high.

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
Company background
ARVINDFA is India's no. 1 casual and denim player, a lifestyle powerhouse with a
strong portfolio of fashion brands catering to consumers across the sub-categories
and price points. With a host of more than 28 renowned brands, both international and
indigenous, like USPA, Arrow, GAP, Tommy Hilfiger, Calvin Klein, Flying Machine and
Sephora, it has presence across lifestyle brands, value fashion and prestige beauty.
These brands retailed in over 1,300 standalone stores and about 5,000 departmental
and multi-brand stores in over 192 cities and towns across India.

ARVINDFA was demerged from Arvind Ltd. w.e.f. 30th Nov’18. Post receipt of various
statutory approvals, it has got listed on both stock exchanges on 8th Mar’19. Swap
ratio for demerger was one equity shares for every five equity shares held in Arvind
Ltd.

Table 7: Key management profile

Name Designation Experience
 He is the Director at Arvind Fashions and Executive Director at Arvind Limited.
 He is driving new initiatives in the consumer businesses of the group. He has been instrumental in setting up
Non- several new retail concepts and also spearheads teh group’s digital initiatives.
Kulin
executive  He also plays an active role in the overall Corporate Strategy.
Lalbhai
Director  Kulin holds an MBA from the Harvard Business School, and a BSc in Electrical Engineering from the Stanford
University.
 Prior to his current role, he has also been a management consultant at Mckinsey & Co.
 He has over 30 years of experience in the FMCG, Lifestyle Brands & Retail industries.
 This included an 18-year stint at Hindustan Unilever Limited, where he headed the Sales Operations of the
MD and beverages business and was a management committee member of the Foods & Beverages business between
J Suresh
CEO 1999 and 2002.
 After HUL, he joined MTR Foods Ltd as its CEO and turned a regional brand into a national and global brand.
 He is an engineering graduate and has a Master’s degree in Business Administration from IIM, Bangalore.
 He is the CEO of Lifestyle Business Division at Arvind Fashions and responsible for strategising, building and
growing a spectrum of very successful iconic brands like USPA, Flying Machine and Ed Hardy.
CEO,
Alok  An alumni of IIM Bangalore, he has over 30 years of work experience in the fashion and lifestyle industry of
Lifestyle
Dubey which the last 15 years are with Arvind.
Brands
 Prior to joining Arvind, he has held pivotal positions across industries and worked with well-renowned
companies like The Swatch Group, Titan Industries, and The Times Of India Group.
 He is a qualified chartered accountant and has over 30 years of finance and supply chain experience across
Pramod
CFO diverse industries in organizations such as Hindustan Unilever Limited, DHL Express, Novartis and Microsoft
Gupta
and Rivigo Services Private Limited.
Source: I-Sec research

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities

Financial summary
Table 8: Profit and Loss statement Table 11: Cashflow statement
(Rs mn, year ending March 31) (Rs mn, year ending March 31)
FY18 FY19 FY20E FY21E FY18 FY19 FY20E FY21E
Operating Income (Sales) 42,189 46,439 49,627 55,354 Operating Cashflow 1,410 1,744 1,857 2,671
Operating Expenses 39,895 43,557 46,571 51,430 Working Capital changes (3,040) (1,314) (143) (1,424)
EBITDA 2,294 2,881 3,057 3,924 Capital Commitments (1,701) (1,695) (1,400) (1,400)
% margin 5.4 6.2 6.2 7.1 Net Operating FCF (3,330) (1,265) 314 (154)
Depreciation & Amortisation 1,389 1,532 1,635 1,763 Investing Activities 211 41 51 60
Gross Interest 913 1,262 1,253 1,211 Issue of Share Capital 3,000 0 - -
Other Income 124 41 51 60 Buyback of shares - - - -
Recurring PBT 116 129 219 1,010 Inc(Dec) in Borrowings 138 908 - -
Add: Extraordinaries - - - - Dividend paid - - - -
Less: Taxes (14) (86) - 101 Others - 151 (54) (59)
Minority interest (16) 49 54 59 Extraordinary Items - - - -
Net Income (Reported) 145 166 165 850 Chg. in Cash & Bank 18 (164) 311 (152)
Recurring Net Income 145 166 165 850 Source: Company data, I-Sec research
Source: Company data, I-Sec research
Table 12: Key ratios
Table 9: Balance sheet (Rs mn, year ending March 31)
(Rs mn, year ending March 31) FY18 FY19 FY20E FY21E
FY18 FY19 FY20E FY21E Per Share Data (Rs)
Assets EPS(Basic) 2.5 2.9 2.8 14.7
Total Current Assets 24,068 27,062 27,166 29,946 Diluted Recurring EPS 2.5 2.9 2.8 14.7
Current Liab. & Prov. 12,838 14,683 14,332 15,840 Diluted Recurring CEPS 26.5 29.3 31.0 45.1
Net Current Assets 11,229 12,380 12,834 14,106 Dividend per share - - - -
Investments of which 0 0 0 0 Book Value 183 195 198 212
Strategic/Group 0 0 0 0
Marketable - - - - Growth Ratios (% YoY)
Net Fixed Assets* 5,326 5,489 5,254 4,891 Operating Income 26.5 10.1 6.9 11.5
of which EBITDA 46.1 25.6 6.1 28.4
Capital Work-in-Progress 6 57 57 57 Recurring Net Income NA 14.8 (0.6) 415.0
Deferred tax assets 2,362 2,692 2,692 2,692 Diluted Recurring EPS NA 14.6 (0.6) 415.0
Total Assets 18,918 20,561 20,780 21,689 Diluted Recurring CEPS 56.6 10.5 6.0 45.2
of which cash & cash
284 121 432 279 Valuation Ratios (x)
equivalents
P/E 303.5 264.8 266.3 51.7
Liabilities P/CEPS 28.6 25.9 24.4 16.8
Borrowings 7,447 8,355 8,355 8,355 P/BV 4.1 3.9 3.8 3.6
Minority Interest 873 912 965 1,024 EV / EBITDA 22.3 18.1 17.0 13.3
Equity Share Capital 232 232 232 232 EV / Operating Income 1.2 1.1 1.0 0.9
Face value per share (Rs) 4 4 4 4 EV / Operating FCF (73.2) 121.4 30.2 41.7
Reserves & Surplus 10,366 11,062 11,227 12,078
Net Worth 10,598 11,294 11,459 12,310 Operating Ratios (%)
Total Liabilities 18,918 20,561 20,780 21,689 Raw Material / Sales 46.9 49.3 49.4 49.7
Source: Company data, I-Sec research SG&A expenses / Sales 28.6 25.6 25.3 24.2
Other Income / PBT 107.5 32.1 23.1 6.0
Effective Tax Rate (11.7) (66.8) - 10.0
Table 10: Quarterly trend NWC / Total Assets 0.6 0.6 0.6 0.6
(Rs mn, year ending March 31) Inventory (x) 4.5 5.4 5.1 5.4
Jun-18 Sep-18 Dec-18 Mar-19 Receivables (days) 50 65 62 55
Net sales 10,068 12,091 12,590 11,690 Payable (days) 83 91 89 82
% growth (YoY) NA NA 17.2 1.5 D/E Ratio (x) 0.7 0.7 0.7 0.7
Recurring EBITDA 403 799 827 852
Margin (%) 4.0 6.6 6.6 7.3 Profitability Ratios (%)
Other income 11 19 11 - Rec. Net Income Margins 0.3 0.4 0.3 1.5
Extraordinaries Inc / (Loss) - - - - RoCE 5.0 6.7 6.9 9.1
Recurring Net Income (159) 60 69 196 RoNW 1.6 1.5 1.5 7.2
Source: Company data Dividend Payout - - - -
Source: Company data, I-Sec research

20
Arvind Fashions Ltd., June 19, 2019 ICICI Securities

Annexure: Index of tables and charts

Tables
Table 1: Valuations based on 15x FY21E EV/E ................................................................... 3 
Table 2: Comparative valuations with peers ......................................................................... 3 
Table 3: Summary of ‘power brands’ portfolio ...................................................................... 7 
Table 4: Significant store expansion opportunity for ‘power brands’ in small towns ............ 8 
Table 5: Summary of speciality retail portfolio .................................................................... 13 
Table 6: We expect revenues/ EBITDA to grow at 9%/ 17% CAGR over FY19-FY21....... 17 
Table 7: Key management profile ....................................................................................... 19 
Table 8: Profit and Loss statement ..................................................................................... 20 
Table 9: Balance sheet ....................................................................................................... 20 
Table 10: Quarterly trend .................................................................................................... 20 
Table 11: Cashflow statement ............................................................................................ 20 
Table 12: Key ratios ............................................................................................................ 20 

Charts
Chart 1: Management expects sharp improvement in RoCE over coming years ................. 3 
Chart 2: ARVINDFA has built a diversified portfolio across categories and price points ..... 4 
Chart 3: Experience of successfully launching brands across all formats ............................ 4 
Chart 4: One in five casual wears bought in premium branded men’s casual/denim market
is from ARVINDFA portfolio ............................................................................................ 4 
Chart 5: Key competitors ...................................................................................................... 4 
Chart 6: Growth in casuals / western wear segment to outperform formal wear segment ... 5 
Chart 7: Premium casuals/ denim leadership revenues grew 20% YoY in FY19 ................. 5 
Chart 8: Kidswear grew 25% in FY19 ................................................................................... 5 
Chart 9: Accelerating USPA innerwear growth ..................................................................... 5 
Chart 10: Sephora plans to expand stores and add online to sustain high growth .............. 5 
Chart 11: Multiple growth opportunities through category/ distribution expansion ............... 6 
Chart 12: Powerful platforms drive growth with improved operational efficiency ................. 6 
Chart 13: ARVINDFA enabled by powerful existing platforms ............................................. 6 
Chart 14: Strong distribution footprint across portfolio ......................................................... 6 
Chart 15: Online sales of ‘power brands’ grew significantly in FY19 on low base ............... 8 
Chart 16: We expect revenue from ‘power brands’ to grow at 9.3% CAGR over FY19-
FY21E… .......................................................................................................................... 8 
Chart 17: … and EBITDA to grow at 8.5% CAGR with flat margins as investments for new
category and network expansion continue...................................................................... 8 
Chart 18: USPA expanded into denims, kids and women segment from 100% mens
casualwear ...................................................................................................................... 9 
Chart 19: USPA emerges as multi-category play with strong presence in causals/denims
by FY19 ........................................................................................................................... 9 
Chart 20: Combined potential of >Rs10bn revenues by FY22 as per management ............ 9 
Chart 21: USPA potential revenue mix by FY22................................................................... 9 
Chart 22: USPA multi-channel presence supports growth ................................................. 10 
Chart 23: Flying Machine department stores’ including value fashion revenues grew 50%
YoY in FY19 .................................................................................................................. 10 
Chart 24: Flying Machine online revenues have doubled YoY in FY19 on low base ......... 10 
Chart 25: Key emerging brands portfolio ............................................................................ 11 
Chart 26: We expect revenues in FY20E to decline 14% YoY on exit of non-strategic
brands ........................................................................................................................... 12 
Chart 27: We expect EBITDA loss to further widen in FY20E on one-time exit loss.......... 12 
Chart 28: We expect specialty retail revenues to grow at 16% CAGR over FY19-FY21E led
by >25% revenues CAGR in GAP and Sephora… ....................................................... 14 
Chart 29: …while we expect EBITDA loss margin to narrow down to ~1% by FY21E ...... 14 

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Arvind Fashions Ltd, June 19, 2019 ICICI Securities
Chart 30: GAP turned EBITDA-positive in Q4FY19 led by increasing local sourcing and…
...................................................................................................................................... 14 
Chart 31: …increasing component of high-margin wholesale business ............................. 14 
Chart 32: ARVINDFA cash conversion cycle* have doubled YoY to 50 days in FY19 on
increase in inventory days and elongated credit cycle ................................................. 15 
Chart 33: …while peer ABFRL have registered marginal increase in the same to 14 days in
FY19 over the same period* ......................................................................................... 15 
Chart 34: ARVINDFA cashflow unable to fund growth over FY17-FY19; the same has been
funded by parent, equity dilution and debt .................................................................... 16 
Chart 35: OCF generations in next two years will be utilised to fund working capital and
capex ............................................................................................................................. 16 
Chart 36: …accordingly net debt to remain flat at Rs8bn over FY19-FY21E ..................... 16 
Chart 37: Return ratios may remain muted in FY20E and then improve ............................ 16 

22
 Arvind Fashions Ltd., June 19, 2019 ICICI Securities
 
 
 
 
 
 
 
 

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the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this
report.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
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report as of the last day of the month preceding the publication of the research report.
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companies including the subject company/companies mentioned in this report.
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This report has not been prepared by ICICI Securities, Inc. However, ICICI Securities, Inc. has reviewed the report and, in so far as it includes current or historical
information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.

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