To bolster its brands and accelerate growth, Arvind Fashions plans to enhance its marketing budget by over 20% this year, gradually increasing from roughly 4% of turnover to more than 5% in the years ahead.
The firm is also expanding its net retail space by 15% annually, with its consumer-focused online segment experiencing a 38% growth during the April-June 2026 quarter. Newer categories such as footwear, womenswear, innerwear, and kidswear saw a growth of 25%.
Arvind Fashions, a notable player in India’s branded apparel sector, currently holds a market capitalization of ₹6,334.07 crore. The company’s shares have dipped by over 5% in the past year.
This is a revised transcript of the interview.Q: Let’s start with margin performance. What guidance can you provide for the future, considering the higher costs resulting from the West Asia crisis and mandated wage increases in various states, which are impacting margins? There’s also the ongoing raw material inflation. What’s your outlook on margins as the year unfolds?A: We have had a robust start to the year in quarter one, achieving a growth acceleration of 15.5%, with EBITDA margins up by 45 basis points. This aligns well with our guidance of expecting 40 to 50 basis points of operating leverage as we boost our marketing investment.
Even with an additional 50 basis points directed towards marketing spend, we have nearly achieved the same amount in operating leverage. This illustrates the resilience of our business model, and I am confident that despite raw material obstacles, supported by our strong franchise, we can maintain our guidance of 40 to 50 basis points of EBITDA margin expansion each year.
Q: Will you further increase your marketing expenditures?A: Absolutely. We are gearing up for significant investments throughout the year. Our aim is to amplify growth and enhance the appeal of our brands. We have signaled to the market an increase of at least 50 basis points in marketing spending on a substantial base, approaching ₹6,000 crore in turnover. This year is pivotal for energizing our platform and driving our growth initiatives.
Q: What is the marketing budget, given your commitment to increase it? How does it compare with previous years? What growth rate do you anticipate year-on-year, and how much acceleration are you predicting?
A: By allocating an additional 50 basis points, our marketing budget is set to grow by over 20% this year from a solid base. Currently, we invest close to 4% of our turnover in marketing, and this will gradually rise to exceed 5% in the upcoming years.
Q: With this increase in marketing efforts, you’re aiming for mid-teens growth. Is high-teens growth attainable?A: We are focused on developing various growth drivers. We’ve communicated to the market our belief in achieving sustainable growth around the 15% mark with our existing strategies.
Besides marketing, we are expanding our square footage, adding 15% net space each year to our existing 1.5 million square feet of real estate. This serves as a significant growth driver.
Our online business is performing exceptionally well, with the consumer-led segment growing by 38% this quarter. Additionally, new categories such as footwear, women’s wear, and kids’ wear have seen a 25% growth. We are optimistic that growth momentum will persist.
For the complete interview, watch the accompanying video
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