Arvind Fashions delivered a strong Q3 FY26, with revenue growing 14.5% and adjusted PAT up 65%, primarily driven by robust direct-to-consumer channels and exceptional performance from the U.S. Polo brand. Despite some headwinds in PVH brands due to GST changes and supply chain issues, and a strategic inventory buildup, management expressed confidence in maintaining double-digit growth and improving operating leverage through continued investment in expansion and premiumization strategies.
vs Q4 FY26
| Metric | Value | YoY |
|---|---|---|
| NSV | ₹1.4K Cr | +14.5% YoY |
| EBITDA | ₹195 Cr | +18.2% YoY |
| EBITDA Margin | 14.16% | +0.4% YoY |
| PAT (Adjusted) | ₹44 Cr | +65.0% YoY |
| Like-for-like Growth (Overall) | 8.2% | — |
| Online B2C Growth | 50% | — |
| Metric | Latest | Trend |
|---|---|---|
| Revenue (NSV)(crores) | 1418 | |
| EBITDA(crores) | 195 | |
| EBITDA Margin | 14.16% | |
| NSV(crores) | 1377 | |
| PAT(crores) | 37 | |
| Online B2C Growth | 50% |
| Category | Headline | |
|---|---|---|
Capex | Capex disclosed | |
M&A | Flipkart stake in Flying Machine (AYBPL) acquisition · closed |
| Category | Target | Priority |
|---|---|---|
| Revenue Growth | Overall Revenue Growth→12-15% | High |
| EBITDA Growth | EBITDA Growth→>15% | High |
| Store Expansion | Net Square Feet Addition→1.5 lakh square feet | High |
| Online Growth | Overall Online Growth→20-30% | Medium |
| Direct-to-Consumer Share | Direct-to-Consumer Share of Sales→75% | Medium |
| Profitability | Flying Machine EBITDA Profitability→some EBITDA profitability | Medium |
| Profitability | Arrow EBITDA Margin→mid-single digit | Medium |
| Working Capital | Inventory Turns→3.8 to 4 | Medium |
| # | Metric | |
|---|---|---|
| 01 | Flying Machine EBITDA Profitability | |
| 02 | Arrow EBITDA Margin | |
| 03 | Overall Online Growth Rate | |
| 04 | Inventory Turns | |
| 05 | Net Square Feet Addition |
| Severity | Risk |
|---|---|
medium | Geopolitical supply chain disruptions PVH brands growth was impacted due to geopolitical supply chain disruptions, causing delayed key inventories, but is now streamlining. Management |
medium | GST rate increase impact on pricing and demand GST transition from 12% to 18% for PVH brands led to price increases and an interim 'sticker shock' for consumers, but sales are now stabilizing. Management |
low | Bangladesh election impact on inventory A conscious decision was made to inward inventory in late December to de-risk potential issues from Bangladesh elections, as 15% of product comes from there; this is expected to be transitory. Management |
Arvind Fashions reported a strong Q3 FY26, with overall revenue growing 14.5% to INR 1,377 crores, marking the highest year-on-year growth in several years. EBITDA increased by 18% to INR 195 crores, accompanied by a 40 basis points margin expansion. The company's direct-to-consumer channels were a key growth driver, now accounting for nearly 63% of sales, a 260 basis points increase over the previous year.
The online B2C segment demonstrated robust growth of nearly 50%, increasing its contribution to 17% of total sales with significant improvements in channel margins. The U.S. Polo brand continued its strong momentum, achieving exceptional growth of over 25%, supported by product premiumization, targeted retail expansion, and strong performance in its adjacent categories, which all grew by more than 25%.
Following the reacquisition of Flipkart's stake, Flying Machine is being repositioned as a Gen Z-focused brand, with a dedicated D2C platform planned for FY27. The brand is already showing 'green shoots' with 17% like-for-like growth in stores and approximately 40% growth in B2C. The company added over 41,000 square feet of retail space this quarter and aims for a net addition of 1.5 lakh square feet for FY26 across its portfolio.
Arvind Fashions has expanded its margins by 140 basis points over the last two years, driven by a focus on cost efficiencies and reduced discounting. Management expects EBITDA to grow more than 15% going forward⏳, attributing this to operating leverage derived from sourcing advantages with scale, increased productivity from high like-for-like growth, and fixed costs growing slower than revenue.
While inventory levels appeared higher, management clarified this was a conscious decision to inward inventory in late December. This proactive measure was taken to de-risk potential supply chain disruptions related to upcoming elections in Bangladesh, which accounts for 15% of the company's product sourcing. Inventory turns are expected to normalize to between 3.8 and 4 once the situation stabilizes.
Despite initial headwinds in PVH brands due to geopolitical supply chain issues and a GST rate increase from 12% to 18%, sales for these brands are now stabilizing. Management expressed confidence in maintaining a double-digit growth trajectory of 12-15% for the year, anticipating that government initiatives will further aid consumer disposable incomes and boost demand in the medium term.