India's Arvind Q3 profit slumps on low sales of denim
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India's textile manufacturer Arvind Ltd reported a 9.3% drop in quarterly profit on Wednesday, hurt by weak demand for denim garments.
The Ahmedabad-based firm posted a net profit of 841.2 million rupees ($10.30 million) for the three months ended Dec. 31, from 927.7 million rupees a year earlier.
The company, which supplies cloth to brands such as Calvin Klein, Ed Hardy, and Tommy Hilfiger, said its quarterly revenue from operations fell 12.8% to 19.80 billion rupees from last year.
While demand and volumes of woven fabric remained steady during the quarter, denim continued to struggle due to lower demand and over-supply, Arvind said in a statement.
The company's revenue from the textiles segment, which contributes about 80% of the company's total revenue, fell 19.2% to 15.49 billion rupees in the quarter. Revenue from denims, which is included in the textiles segment, fell 44.8%.
Its advanced materials unit reported a 26.5% rise to 3.38 billion rupees.
The price realisations started to trend down since the second quarter reflecting the recent softness in raw material prices, the company said.
Arvind's expenses were down 11% in the quarter.
"Marco environment in U.S. and EU markets has started to show some improvement in the outlook, though the overall prognosis still remains cautious given still higher-than-target inflation in U.S., continuing war in Europe and reopening of China," Arvind said.
Demand for Indian textiles in international markets was hit as consumers cut spending on clothing following a surge in inflation after the war in Ukraine.
($1 = 81.6190 Indian rupees)
