Textile stock to buy now for an upside of 116%; Recommended by Motilal Oswal

Synopsis:- Brokerage flagged nearly 116% upside, citing strong brand-led growth and improving profitability. Q2 revenue rose 11% to  Rs 1,418 crore, profit climbed 24% to  Rs 56 crore, while operating margins stayed healthy at 12–14% with robust online and store expansion.

India’s speciality retail sector thrives amid booming consumer demand for curated, experience-driven shopping in niches like apparel, beauty, and electronics. Valued within the broader retail market at USD 1,060.55 billion in 2025, it grows at a robust 11.40% CAGR, projected to hit USD 3,121.64 billion by 2035. Urban millennials fuel this shift with rising disposable incomes and a preference for personalised services over generic outlets.

With a market capitalisation of Rs 6,891.28 crore, the shares of Arvind Fashions Ltd closed at Rs 515.55 per share, increased around 4.43 percent as compared to the previous closing price of Rs 493.70 apiece.

Brokerage Recommendations

Motilal Oswal has turned optimistic on the textile stock, issuing a ‘Buy’ rating with a base target price of  Rs 725 per share, implying nearly 49% upside from the previous close of  Rs 493. The brokerage cited improving fundamentals and a stronger growth outlook. In a more optimistic bull-case scenario, it has set a target of  Rs 1,065, indicating a substantial upside potential of around 116% from previous levels.

Motilal Oswal views Arvind Fashions as a leading branded apparel player backed by a strong portfolio of marquee brands such as US Polo Assn., Tommy Hilfiger, Calvin Klein, and Arrow. The brokerage believes the company is at an inflection point, moving from consolidation into a phase of profitable growth and scale-up, supported by improving operations and brand traction.

The company is entering its next growth phase by doubling down on five core power brands that will drive scale and profitability. Growth is expected to come from brand-led expansion, entry into adjacent categories, and operating leverage. These initiatives are projected to deliver a 13% revenue CAGR between FY26–FY28, along with a margin expansion of about 190 basis points.

Financial Highlights

The company reported steady growth in Q2FY26, with revenue rising 11% to  Rs 1,418 crore from  Rs 1,273 crore a year earlier. Profitability also improved, as net profit increased 24% to  Rs 56 crore, reflecting better operating efficiency and sustained demand across its core businesses.

Over the last one year, Arvind Fashions has shown steady operating improvement. Operating profit rose from  Rs 162 crore in Sep 2024 to  Rs 187 crore in Sep 2025, despite interim fluctuations. Operating margins remained resilient in the 12–14% range, reflecting disciplined cost control, better execution, and sustained profitability across quarters.

The company has solid business momentum with overall growth of 11.3% driven by strong execution across channels. Online direct-to-consumer activity grew over 50%, while adjacent categories expanded by 20%+. The company added 24 new exclusive outlets, improved margins by 210 basis points, and maintained stable working capital with inventory turns improving by 3.8%.

Arvind Fashions Ltd is a leading Indian branded apparel company and part of the Lalbhai Group. It owns and operates a strong portfolio of global and homegrown brands, including US Polo Assn., Tommy Hilfiger, Calvin Klein, Arrow, and Flying Machine, catering to India’s premium and mass fashion segments.

Written by Abhishek Singh

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