'Buy Arvind', IIFL says, as firm evolving into a vertically integrated unit

Shares of Arvind Ltd. have the potential to gain 30%, as per brokerage firm IIFL Finance, which initiated coverage on the stock.

IIFL Finance has initiated coverage with a "buy" rating on Arvind Ltd. with a price target of ₹451 per share. The stock ended the previous session at ₹346.35 apiece.

IIFL Finance is of the view that the company is evolving from a largely fabric-centric player into a value-added, vertically integrated textile and advanced materials (AMD) firm.

The brokerage believes that legacy challenges that muted the company's performance between financial year 2018 to 2025, such as high debt, upstream focus, a nascent AMD business, and episodic disruptions, are now largely behind, and a stronger performance over the past four to six quarters underscores a clear turnaround.

With a well diversified revenue base, the firm faces limited direct impact from US tariffs, the brokerage said.

IIFL Finance said that with investments increasingly directed toward garmenting and Advanced Materials Division, and upstream capex largely limited to modernisation, Arvind Ltd. is well-positioned for more profitable, higher-quality growth. Further upside is also possible over the scope for margin improvement.

Arvind Ltd. reported its second quarter earnings earlier this month. Its net profit increased by 73% to ₹103.4 crore from last year's ₹59.7 crore. Its revenue was up 8.4% to ₹2,371 crore, while its earnings before interest, tax, depreciation and amortisation increased 11.8% to ₹247 crore. The company's margin expanded marginally to 10.3% from 10.1% in the year-ago period.

Shares of Arvind ltd. are currently trading little changed at ₹347. The stock is up 13% in the last one month. However, it has been an underperformer in 2025, with a decline of 16% so far.

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