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May 23, 2011
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Arvind Q4 net triples; to merge group co with self

May 23, 2011

May 20 - Textile firm Arvind Ltd will merge group company Arvind Products with itself, a move that is likely to help save as much as 100 million rupees in costs annually from FY12, a senior official said on Friday.

Textiles factore in India (Photo: Corbis)

Shareholders of Arvind Products, in which Arvind holds 54 percent, will get one share of the latter for every 11 held, it said in a statement.

"Both are textile businesses and we have lot of inter-linkages in terms of supply and raw material. So everytime we supply we end up paying taxes in terms of sales, VAT, excise duty. So, we expect this merger leading to savings in costs," Director Jayesh Shah told Reuters over the telephone.

The company's consolidated net profit more than tripled in the March quarter to 630 million rupees on strong volumes and better realisations. Its revenues grew 59 percent to 12 billion rupees.

For the full year, net profit more than tripled to 1.65 billion rupees as sales grew by nearly a quarter.

Shah expects the firm's topline to grow at 20 percent in FY12.

Post-results, shares of Arvind extended gains to more than 5 percent to a day's high of 74.7 rupees in a firm Mumbai market. They ended up 3 percent at 73.15 rupees.

The firm, which has also diversified into real estate, said it was on track for "unlocking value of its land bank." It is looking to liquidate 8-9 billion rupees worth of land over the next 3 years.

Earlier this month, it formed a joint venture with Tata Housing to develop a township with projected revenue of 20 billion rupees.

The company expects to earn about 2 billion rupees from its real estate business in FY12, Shah said.

(Reporting by Swati Pandey; Editing by Sunil Nair)

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