Arvind Ltd stock zooms 9% on resumption of operations at Ahmedabad unit

Shares of Arvind Ltd rose over 9% today after the textile company said its operations have fully restarted at the Ankur unit in Ahmedabad. Operations were disrupted due to disconnection of the effluent discharge connection, the company said.

The small cap stock touched an intraday high of Rs 125.9, rising 9.24% against the previous close of Rs 115.25 on BSE. The stock opened with a gain of 3.95% at Rs 119.80 today.

Market cap of the firm rose to Rs 3,239 crore on BSE.

A total of 2.14 lakh shares of the firm changed hands amounting to a turnover of Rs 2.64 crore on BSE. Arvind Ltd stock trades higher than 5-day, 20-day and 200-day moving averages but lower than 50 day and 100 day moving averages.

The share has gained 63% in one year and risen 2.61% since the beginning of this year.

"Listing Regulations and further to our letter dated November 30, 2021 regarding the disruption of operations at Ankur unit of the company due to disconnection of effluent discharge connection of the unit, we hereby update that the operations have fully resumed at the Ankur unit," Arvind Ltd said in a communication to bourses.

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The company said that due to the closure, its revenue and EBIDTA have reduced by approximately Rs 40 crore and Rs 10 crore, respectively (most of which was during January & February 2022.

Ankur unit contributed 5% of the consolidated revenue and 6% of the consolidated EBIDTA of the company for financial year ending March 31, 2021, it added.

In November-end last year, the textiles and apparels major said the effluent discharge connection of its Ankur unit in Ahmedabad was disconnected following a Gujarat High Court order.

The effluent discharge connections of about 141 units, including that of Ankur unit of the company were disconnected, following the High Court order to close all the units discharging water effluent in the sewage lines of Ahmedabad Municipal Corporation (AMC), Arvind Ltd said in a regulatory filing.

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The company had filed a petition in the High Court against the closure

In the third quarter of current fiscal, Arvind reported a 272% rise in net profit at Rs 92.77 crore against net profit of Rs 24.91 crore in the corresponding quarter of previous fiscal. Sales climbed 50 per cent to Rs 2275 crore in Q3 against Rs 1513 crore sales in the year-ago period.

Operating profit rose 46.13 per cent to Rs 236.84 crore in the last quarter against Rs 162.08 crore in Q3 of the previous fiscal.

Arvind Limited is a vertically integrated textile company. The company's segments include textiles, advanced materials and others. It also manufactures a range of cotton shirting, denim, knits and bottom weights (Khakis) fabrics and jeans and shirts garments.

Its businesses include fabric and apparel, brands and retail, real estate, engineering, Internet, environmental solutions, advanced materials, telecom and garmenting.