India’s Arvind Fashions Ltd has reported a 15.5 per cent YoY rise in Q1 FY27 revenue to ₹1,279 crore (~$127.9 million), driven by strong direct-to-consumer channel growth.
EBITDA increased 19.6 per cent, while PAT declined due to lower other income.
The company expects 12-15 per cent revenue growth in FY27 supported by retail expansion, AI adoption and operational efficiencies.
Commenting on the results, Amisha Jain, managing director and CEO of Arvind Fashion, said the company delivered strong operating performance despite inflationary pressures arising from the West Asia conflict, higher petroleum prices, elevated foreign exchange rates and minimum wage increases across several Indian states. She added that healthy working capital of 65 days and improved inventory freshness supported the company’s performance.
The gross margin expanded by 90 bps to 56.7 per cent, aided by higher full-price sell-through and lower discounting.
The profit after tax (PAT) from continuing operations declined to ₹10 crore from ₹13 crore in Q1 FY26 due to lower other income, despite higher operating profitability.
Retail and online channels sustain growth momentum
The company’s direct channels continued to outperform during the quarter. Like-to-like (LTL) retail sales grew 11.6 per cent, while the online business-to-consumer (B2C) channel expanded by around 38 per cent.
Direct channels accounted for 62 per cent of total revenue. AFL operated 1,030 exclusive brand outlets (EBOs) at the end of June 2026, with a net addition of around 20,000 square feet during the quarter, AFL said in a press release.
The company said the ongoing conflict in West Asia remains a key business risk. It noted that raw material prices, after easing briefly, have started rising again, while the rupee has recently touched an all-time low against the US dollar, increasing pressure on raw material imports, shipping costs and capital expenditure.
The company also identified potential risks including a consumption slowdown caused by supply-led inflation, further weakness in the rupee, soaring fuel and raw material costs, and possible shortages of production inputs and capital equipment.
To mitigate these challenges, AFL said its long inventory cycle has shielded it from immediate inflationary pressures. The company continues to monitor developments and hedge exposures where required, while strengthening its India-based sourcing network. It also plans to evaluate price increases to offset higher input costs and has implemented cost-control measures to manage volatility.
FY27 growth targets and profitability outlook
For FY27, AFL is targeting revenue growth of 12-15 per cent, supported by faster expansion in adjacent categories. It expects operating leverage to improve EBITDA and PAT margins while increasing investments in advertising to strengthen brand salience and market share.
The company also plans to expand its direct channels, aiming to increase the share of retail and online B2C sales by 100-200 basis points. It intends to open around 150 new stores, largely through the franchise-owned, franchise-operated (FOFO) model, while generating higher free cash flow through working capital efficiency and an asset-light approach. AFL also plans to leverage artificial intelligence and analytics to improve cost efficiencies, pricing, assortment planning, retail operations and marketing effectiveness.
Fibre2Fashion News Desk (SG)
