Arvind Fashions, a midcap player in the retailing industry, has recently experienced a downgrade in its stock call to ‘Hold’ by MarketsMOJO on January 10, 2025. Despite this, the company reported very positive financial performance for the second quarter of FY24-25, showcasing an impressive annual growth rate of 39.73% in operating profit and a remarkable 223.49% increase in net profit. This marks the fifth consecutive quarter of positive results for Arvind Fashions.
The company’s operating cash flow reached its highest at Rs 434.18 crore, while the return on capital employed (ROCE) stood at 14.13%. However, the technical trend has shifted to sideways, indicating no clear price momentum, with a slight decline of 2.01% since the downgrade.
Arvind Fashions maintains a strong institutional holding at 31.45%, reflecting confidence from larger investors. However, the company faces challenges with a high debt-to-EBITDA ratio of 4.58 times, indicating low ability to service its debt. Additionally, the average return on equity is at 2.22%, suggesting low profitability per unit of shareholders’ funds.
