Arvind Ltd shares gain on strong business outlook and valuation

Arvind Limited shares surged 4 per cent to Rs 262.40 on Tuesday after Motilal Oswal, a brokerage house, projected that Arvind's brands and retail business will double revenue and margins over the next three years.

The BSE Sensex gained 0.27 per cent at 27804.37.

At current market price, the share price of the company was trading at trailing 12 months price to earnings (P/E) ratio of 17.26 against industry P/E of 21.01, indicating undervaluation of stocks.

According to Thomson Reuters data, share of Arvind are trading at 14x 1-year forward earnings.

For the year ended March 2015, the company reported net profit of Rs 377.43 crore, up 4.44 per cent against Rs 361.39 crore a year ago.

Arvind Ltd is engaged in manufacturing of high-end superfine fabrics.

(With inputs from Reuters)