Arvind Limited: Navigating Tariffs with Resilient Growth in Q2 FY26

Arvind Limited, a prominent player in the Indian textile and advanced materials sector, has reported a robust performance for the second quarter of Fiscal Year 2026, demonstrating strategic agility amidst a challenging global environment. The company's consolidated revenue from operations reached ₹2,371 crore, marking an 8.4% increase year-on-year. This growth was complemented by a 13% rise in EBITDA to ₹262 crore, and a significant 70% surge in Profit After Tax (PAT) to ₹107 crore. These figures underscore Arvind's ability to sustain momentum and profitability, even as it grapples with external pressures like US tariffs.

The quarter saw strong operational execution across key segments. The Textiles division, encompassing Fabric and Garmenting, reported impressive volume growth, with its near-term order book fully booked. Garmenting volumes expanded by 17% year-on-year, surpassing 10.7 million pieces, while Denim volumes increased by 16%, achieving their highest performance in 13 quarters. This growth was largely driven by higher capacity utilization, new customer acquisitions, and increased verticalization. The Advanced Material (AMD) division also contributed positively, registering a 15% year-on-year revenue growth with stable margins. The AMD business has recently been demerged into a wholly-owned subsidiary, Arvind Advanced Material Limited (AAML), a strategic move aimed at enhancing flexibility and focus.

Strategic Maneuvers Amidst Headwinds

Despite the positive performance, the company acknowledged the impact of US tariffs, which restricted margin expansion by approximately 41 basis points and resulted in a ₹23 crore impact in Q2. To counter this, Arvind implemented aggressive cost optimization and efficiency measures, which yielded structural savings and partially offset the tariff burden. Management's proactive approach included diversifying geographical metrics, with increased focus on Australia, the Middle East, the UK, and the EU, alongside a robust domestic B2C business that has now crossed ₹1,000 crore and is expected to grow over 20%.

Arvind's commitment to sustainability remains a core pillar of its strategy. The company commissioned India's first supercritical CO2 dyeing facility, a ₹25 crore investment, which promises significant reductions in water, energy, and chemical consumption. Furthermore, a partnership with US-based Circ Incorporation aims to integrate next-generation recycled fibers, fostering circularity in textiles. The validation of its near-term and long-term net-zero targets by the Science Based Targets initiative (SBTi), aligning with a 1.5°C pathway by FY2050, underscores its leadership in climate action.

Segmental Performance Highlights

The segmental breakdown reveals the underlying strengths. Textiles, the largest segment, generated ₹1,803 crore in revenue, contributing 75.96% to the total. Advanced Material contributed ₹446 crore (18.79%), while other businesses accounted for ₹185 crore (7.8%). The inter-segment eliminations amounted to -₹63 crore.

Outlook and Investor Confidence

Looking ahead, Arvind Limited anticipates a healthy Q3 FY26, aligning with the seasonally stronger second half. The AMD division is projected to achieve 18-20% revenue growth, and Garmenting volumes are expected to maintain mid-teen growth. While a tariff impact of ₹25-30 crore on quarterly EBITDA is foreseen for Q3, management actions on the cost front are expected to partially offset this. The company's FY26 CAPEX is estimated at ₹400-450 crore, with ₹220 crore already invested. The management's disciplined capital allocation and proactive risk management, coupled with its strong operational performance and strategic initiatives, reinforce investor confidence in its sustained growth trajectory. Arvind Limited continues to demonstrate resilience and strategic foresight, positioning itself for long-term value creation.